The House met at 2 p.m.

Prayers.

PEANUT PLANT

Mr. Nixon: Mr. Speaker, I rise on a matter of privilege. I feel I would transgress the privileges of the honourable members if I did not inform them, through you, sir, of the opening of an entirely new industry in Ontario. I refer to the growing of peanuts.

The Minister of Agriculture and Food (Mr. Henderson) cut the ribbon of a new plant today in the constituency of Brant-Oxford-Norfolk and a good deal of thanks must be directed to the government of Canada, the government of Ontario and the initiative of Mr. James Picard and his family.

I raise this only to bring to your attention, Mr. Speaker, that this is a completely new industry for the farming economy of Ontario and Canada and there is every expectation it will grow to be a major one.

To mark it, Mr. Speaker, I want to present you with a bag of these excellent peanuts. I do not know whether in your well-known abilities you can, like the loaves and fishes of old, make these pass all around the Legislature, but do your best.

Mr. Speaker: I want to thank the member for Brant-Oxford-Norfolk for this presentation and I hope there is no other significance to handing them out in the Legislature as the regular diet around here.

CORRESPONDENCE FROM PRISON INMATE

Mr. Breaugh: Mr. Speaker, this morning I received some correspondence in the mail here at Queen’s Park from one Anthony Genovese, a prisoner at Millhaven Penitentiary near Bath, Ontario. When my assistant picked up this envelope, it was obviously damaged. As is normally the case, he had to sign a small document indicating it had been received in that condition. However, the other end of the envelope had obviously been opened. The correspondence from a prisoner in a penitentiary had clearly been opened somewhere between Bath, Ontario and Queen’s Park.

We are aware that correspondence from prisoners is monitored at the prison site. I was not aware, however, that a member’s mail was opened by someone at Queen’s Park. We checked with the government mail services and they deny all knowledge of it. We are attempting to get some information from the Post Office as to how this unusual event might have occurred. It seems apparent to me that someone did indeed open this envelope and view the contents. The contents contain some rather startling allegations that I will set aside for now and deal with on another occasion.

When a member’s mail is opened somewhere between the point where it is mailed and where it is received here, I do feel my privileges have been breached. I would ask you, Mr. Speaker, to investigate this incident to see who opened this mail, for what purposes it could conceivably have been opened and who should take responsibility for that act.

Mr. Speaker: All I can tell the honourable member at this point is there is a facility either in the basement of this building or in the Macdonald Block for making sure that mail reaching all members of this House is safe and does not pose a potential threat. However, I did not think the inspection of that mail included the opening of it. I will take what the honourable member has said under advisement, attempt to determine how it was opened or intercepted and report back to him.

STATEMENTS BY THE MINISTRY

DURHAM REGIONAL ENVIRONMENT HEARING

Hon. Mr. Parrott: Mr. Speaker, last Friday the Environmental Assessment Board released its report and recommendations on the proposal from the regional municipality of Durham to convert the Ajax sewage treatment plant into a liquid waste treatment facility. The hearing was held under the Environmental Protection Act and, as stipulated in the act, recommendations have been made by the board as a whole to the ministry’s director of approvals. The project can only proceed with a certificate of approval issued by the director.

I have discussed the issue with Mr. Walker Beath, the outgoing regional chairman, and the local MPP, the member for Durham West (Mr. Ashe). As a result, I have arranged for a meeting Thursday with the director, the member for Durham West and the new regional chairman who is to be elected Wednesday. I expect to announce the results of that meeting in the Legislature on Thursday of this week.

In making its final report and recommendations, the board acted in full accordance with the procedures laid out in the Environmental Protection Act and was within its powers. However, I accept that in this instance these procedures did not encourage public confidence. Therefore, I will introduce legislation as soon as possible to amend the procedures so that the hearing panel itself will make the final report and recommendations directly to the ministry.

ORAL QUESTIONS

ENVIRONMENTAL ASSESSMENT

Mr. S. Smith: Seven ministers are here, Mr. Speaker. Let the record show that out of 26 or 27, seven have deigned to come for question period.

I will ask the Minister of the Environment why it is that he and the Premier (Mr. Davis) continue to go around Ontario claiming that a hearing on the South Cayuga matter would take three to five years, when the Canadian Environmental Law Association says it could be done in one year and when it is obvious to me it can be done in one year. May I ask what basis the minister has and what proof he has that a hearing would take from three to five years, especially when some of the preliminary engineering work is already done? What is his basis and proof for that statement? If he does not have any, would he kindly stop misleading the people of Ontario by telling them there has to be a three-year or a five-year delay when it simply does not appear to be so?

Hon. Mr. Parrott: Mr. Speaker, the Leader of the Opposition might think it can be done in a year, but I am afraid he is just not correct in that assessment. Let me give a prime illustration: There was a proposal over a year ago for an environmental assessment on two specific sites. The review has not been published as yet, and the hearing has not even been set, so that those hearings take a very considerable period of time, and rightly so.

Not only that, there is a good number of appeal procedures that can be followed subsequent to that. Anyone who thinks it can be done in a year is not looking at the record and has not assessed, for a matter of this type, the time interval it requires. I am sure if the leader of the Liberal Party were at all accurate in making that assessment, he would clearly understand that a year is not even remotely possible.

Mr. S. Smith: By way of supplementary, will the minister then take out of the record the statement, which he and the Premier have been repeatedly making publicly, that it will take three to five years? Will they remove that from the record and leave truthful statements on the record and simply tell the people that in the experience we have had, for instance in the hearing held with regard to the waterfront park on Lake Ontario, a complex matter indeed, the decision took some 14 months, and in the Ajax hearing, the time from the beginning of the hearings right to the actual decision being handed down was about 11 months?

Why will the minister not have enough confidence in his admittedly very weak position on South Cayuga to go to the people and simply say he is running roughshod over the authority of this province, using his ministerial authority simply because he feels the time has come to do it, and not pretend that there is the slightest basis for claiming that a three-year to five-year delay would be involved in such a hearing?

2:10 p.m.

Hon. Mr. Parrott: I think I have answered that question already, Mr. Speaker.

Mr. S. Smith: No, the minister did not. Where is the proof it will take three to five years?

Hon. Mr. Parrott: Indeed, there is a lot more proof for that than there would be that it would take a year. I do not think there is any argument about that at all.

Let me give the Leader of the Opposition an illustration of where the member thinks it can be done quickly. One of the first things I heard of when I was in the ministry was the Orillia Light and Power proposal. That has been going on for about two years now and the hearing date has not been set.

Mr. S. Smith: Does the minister mean an environmental assessment hearing on that?

Hon. Mr. Parrott: I do not think the member would be surprised, if indeed there is a concentrated effort to delay the process, that there is not much doubt about how long that can take.

Mr. S. Smith: Will there be an assessment hearing on that?

Hon. Mr. Parrott: No, I said it is proposed. If the member wishes to drag it out, and there are many who do for a lot of reasons, it was indicated very positively in both Thorold and Harwich that there is a great way of dragging out procedures. I am not going to enter into any further debate with the Leader of the Opposition. He just happens to be wrong.

Mr. Cassidy: Supplementary, Mr. Speaker: The minister mentioned the light and power situation. I have had a chance to talk with people in the area. They expressed enormous concern over the delays within the Ministry of the Environment in processing the assessment after it had been prepared in good order and submitted to the Minister of the Environment. Why is the minister using the delays and the incompetence of his own ministry as an excuse for trying to knock out a process, which by now should have been made to work effectively on behalf of the protection of the environment and to reassure the public?

Is he not aware that the MacLaren company, the consultants who studied the various sites for liquid waste dumps across the province, told us the environmental assessment required on South Cayuga could be now prepared within a matter of two or three months? Given that, and given the fact that over the weekend the minister is quoted as delaying the arrival of liquid wastes at South Cayuga until 1982, surely there is time to carry out an adequate environmental assessment that will reassure people in the area and across the province that this government still believes in the protection of the environment?

Hon. Mr. Parrott:. This is another absolutely colossal illustration of the fact that the member does not understand the act. I think that is absolutely correct because of what he just said.

One thing I would want to be taken from the record is the word “dump.” I wish the member, in fairness, would remove that word “dump” because that is just not a fit description of this particular proposal.

Mr. Cassidy: Just answer the question.

Hon. Mr. Parrott: This is, indeed, the most modern, the most up-to-date, the best facility it is possible to devise any place in the world to treat waste. It is not a dump.

Mr. S. Smith: What has that got to do with it?

Hon. Mr. Parrott: It has a great deal to do with it. If the member confuses those two issues he confuses the whole matter. It might be appropriate to want to continue to call it a dump; I can understand that, but I am going to insist that we at least do the appropriate thing and call it what it is.

Mr. T. P. Reid: Yes, a dump.

Hon. Mr. Parrott: The member is wrong. I am going to insist on that. It is not even remotely close. It is the best facility it is possible to build any place in the world. It is a treatment facility. If we continue the present practice, that is put our waste on our land in a true dump fashion, then there will be very serious repercussions from the status quo. It must change. It is essential that it change.

To address more specifically the question raised by the leader of the third party, the Environmental Assessment Act itself, both in its conception and in its practice, was never designed to go to a hearing. It was designed to try to address the many issues through the process of consultation in a co-operative way. That is what an environmental assessment is all about. We on this side of the House fully believe that with Dr. Chant as chairman of that particular corporation -- and interestingly enough in a discussion this morning with Her Worship we agreed -- the concept for this facility is the right way to go, with a corporation running it, and the government taking full responsibility for it. On that, it is rather interesting that we fully agree.

She knows, and rightly so, that Dr. Chant and the corporation will have to satisfy the public as to the appropriateness of that site. Nothing short of that would satisfy any of us in this government. We want the technology discussed with full public participation. That will continue, because there is nothing in that proposal that does not, I think, adhere to the terms of the best technical facilities possible.

We are going to assure the people of that area that it will be the best, that it will be technically safe and that they will have a full opportunity to understand all of those attributes of the proposal.

Mr. Cassidy: On a point of order, Mr. Speaker: I will stop calling the facility at South Cayuga a dump when the Minister of the Environment agrees to an adequate environmental assessment of the proposal.

Mr. Speaker: That is not a point of order.

Mr. S. Smith: How does the minister expect anybody to have confidence in what he says is going to be such a modern and fine facility, well located and everything else -- a repository or whatever we are going to call it -- if all the public is going to have to go on are press releases issued by his ministry and by the crown agency and if people will not be able to ask questions, cross-examine wit-nesses or have competing witnesses?

If the minister wants to say that in point of fact hearings are not necessary, do I take it that among the amendments he is going to suggest is the elimination of the possibility of hearings in Ontario? If hearings are not needed about this or about Darlington, what conceivable reason would there be for hearings on any environmental project in Ontario?

Hon. Mr. Parrott: I do not want to enter into a flippant exchange on who will promise what. I know this: If the members opposite would make a concentrated effort to see that the conditions of the hearing process worked, particularly in many areas where they could have and absolutely refused to do so, we would all be better served. But that is an aside.

I think the way we can assure the people is the same way it was assured to the Ontario Federation of Agriculture or the conservation council, that we are putting the very best person it was humanly possible to find, not only in this province but --

Mr. S. Smith: Don’t try to hide behind Dr. Chant.

Hon. Mr. Parrott: I am not trying to hide. Sometimes it is nice to get the facts on the record. I have not heard one single word that anyone challenges that statement. It is utter nonsense that I am somehow or other hiding behind him.

He is the best person. I think the mayor is prepared to accept that he is. Given the licence she or her appointee has, and the fact the public will have four out of the seven members on the corporation, it is made clear this government wants very much to be able not only to say, but to ensure that this facility will become the best in the province.

Mr. Speaker: That was not really part of the question.

Mr. Isaacs: Supplementary, Mr. Speaker: Given that it is the technical studies and research which take time in preparation for an Environmental Assessment Board hearing, do the minister and his ministry intend to do exactly the same research and technical studies they would do if there were to be an environmental assessment? If they do, what will the minister do if those technical studies find the South Cayuga site is unacceptable for the acceptance of liquid industrial waste?

Hon. Mr. Parrott: Mr. Speaker, I am pleased to answer that question. The ministry will not do it; the crown corporation will do it. The commitment has been very clear and concise: If that site is not totally safe for the residents of that community it will not proceed. It is that simple.

Mr. S. Smith: In whose opinion?

Hon. Mr. Parrott: In the crown corporation’s opinion. I think that should be clearly put forward.

We are going to a crown corporation, predominantly served by the public, with two from the local area, that is where the decision is made that the site must be safe or it will not proceed. That followed from the statement made here Thursday. As a matter of fact, I think radio station CFRB reported it exactly that way.

2:20 p.m.

LIQUID INDUSTRIAL WASTE

Mr. S. Smith: I have a question on a different matter for the Minister of the Environment, Mr. Speaker.

The minister will undoubtedly be aware of Interflow in Hamilton, the firm that was using its premises to bring in all kinds of imported liquid wastes and shipping them to the Upper Ottawa Street site, contrary to the certificate of approval. Among its other activities, apparently, was the dumping of 150,000 gallons of extremely dangerous and volatile liquid waste directly into the Hamilton harbour.

Given that the company or someone must undoubtedly have been paid at least $15,000 to take that waste away from whoever the originator happened to be, does the minister feel it is reasonable that the person who has just been convicted of having illegally dumped 150,000 gallons should have been fined the princely sum of $500? Does it seem sensible to the minister that $500 should have been settled upon as a fine for dumping 150,000 gallons into the bay? If not, does the minister realize that plea bargaining went on and that more serious charges were put aside when the person who was charged admitted some guilt with regard to the regulatory offence?

Hon. Mr. Parrott: I do not think that is an appropriate fine and that is precisely why I said last week we would bring in, for first reading this week, legislation for minimum fines. They are a long way from $500.

Mr. S. Smith: By way of supplementary, the apparent reason the crown acceded to the motion of not proceeding with the more serious charges would appear to be that as usual, as with every other aspect of this case of Interflow and Upper Ottawa Street, the ministry was unable to get it back together to make the charges stick. So the people of Hamilton have now had at least 150,000 gallons, and maybe much more than that, dumped into the bay for the princely sum of $500. When is the minister going to clean up the act in his ministry and stop promoting the very people who made this mess in the first place?

Hon. Mr. Parrott: The member has just made an absolutely magnificent case for the urgency of getting on with the treatment facility that we need in this province so that it cannot happen again. I cannot think of a better reason for saying we need a treatment facility. We need a waybill system, we need a site that will address all of those issues. That is precisely why I think we should be moving in the direction we are. We should do so with the utmost haste and we are proceeding just exactly that way.

Mr. Isaacs: Mr. Speaker, the minister promised us a while ago that he would be introducing legislation to tighten up on the penalties under the Environmental Protection Act. That legislation is not here yet. When can we expect to see it and when will he start getting tough with the people who break the rules that are designed to protect the environment of this province?

Hon. Mr. Parrott: I really cannot understand how the member can ask that question, after I have said very clearly three times in this Legislature, the last time less than two minutes ago, that we would be introducing that legislation this week. How many times must I repeat that very simple statement? I really do not think it is too much to expect that to be heard.

When will we start to get tougher? We started a long time ago. I read into the record very quickly at the end of the debate last Thursday afternoon many of the things we have done. If the member would take the time to read about two minutes of that debate, at about 5:55 p.m., he will find a list of about 15 things we have done to make a much tougher, more stringent enforcement of the legislation to deal with the problem he says should be dealt with.

ENVIRONMENTAL ASSESSMENT

Mr. Cassidy: Mr. Speaker, I have a new question for the Minister of the Environment about the very rapid changes in policy with respect to liquid waste which have been taking place within the government over the course of last week.

The minister has just said that because of criticism of the Ajax decision, because the handling of it did not encourage public confidence, he is now prepared to make changes in the Environmental Protection Act. He has also stated -- and this is new -- that if the South Cayuga site is not totally safe, then it will not go ahead. On Friday, the Premier (Mr. Davis) said that there will be public hearings. We had that assurance for the first time.

Will the Minister of the Environment tell the House what form of public hearings the government has in mind and why it is that those public hearings cannot take place under the procedures established by the Legislature through the Environmental Assessment Act?

Hon. Mr. Parrott: Very simply, I think the Premier said what, with respect to the Premier, I had said previously. When Dr. Chant was appointed to the corporation, we discussed the conditions. One was that there would be a new technical assessment of the site and the second was what arrangements we would work out for him with the boards --

Mr. Warner: The minister is backtracking through sludge.

Hon. Mr. Parrott: Not a bit. Go and check the records. I am happy that he and the local people -- we still listen to the local people. I read with some interest over the weekend an article in the Chatham Daily News and I would like to put this on the record, Mr. Speaker. It was a statement by the member for Kent-Elgin (Mr. McGuigan) and he said, “Dr. Parrott’s decision to withdraw clearly is proof that the government still listens to the public.” How right he was.

Mr. Cassidy: In view of the commitment to listen to the public which the minister has reiterated now and which he gave to the Legislature at the conclusion of last Thursday’s emergency debate, is the minister prepared and is the government prepared to listen to the Ontario Federation of Agriculture’s demand that there be hearings under the Environmental Assessment Act? Is he prepared to listen to the similar demand which is being voiced, not only by people in South Cayuga, but by the regional council in that particular area?

Is the minister prepared to listen to environmental groups from across the province which are saying that the procedures under the Environmental Assessment Act should be followed? Will he bring in hearings that respect the purposes of the Environmental Assessment Act, which ensures that the public has a right to participate and ensures that the public has the right of access to the internal assessments done either by the ministry or by the crown corporation?

Hon. Mr. Parrott: Of course, Mr. Speaker, and that has been said many times previously. The Ontario Federation of Agriculture passed a resolution. I went down to see the federation of agriculture and I think they heard some testimony from some of their members who thought the matter should be reopened, given some of the new information they had. That is going to be done. On December 10, they are going to assess the proposal that I put forward.

I am more than happy to have the federation discuss that matter. They see some great wisdom in having the technical advisory committee work with the corporation. I think that is fine. I cannot tell the member how important it is that the public know what is going on. We will be more than pleased to fulfil every requirement in that regard, and if it means a technical advisory committee, that is great. If it means that there should be information houses there, that is great.

If it means that they want some more information, I am sure Dr. Chant will find this government more than prepared to fund that kind of activity, no problem at all. I think we will find that once that facility is in place we will have done in this province, in this government, what will cause everybody else to come to us and say: “How did you do it? Is it not great that you have those facilities? It will be the best in the world. We only wish we had the same.”

Mr. J. Reed: Supplementary, Mr. Speaker: Since it appears that there is a pretty clear pattern emerging on these major projects of avoiding the Environmental Assessment Act at all costs -- and I would refer to the Darlington project, which exemption was justified on the urgency of time, and to the Bradley-Georgetown corridor where the avoidance of application of the Environmental Assessment Act was done for that very reason, and to the fact that the minister has stated here today in the House that this particular project would be dealt with in a different way because of the urgency of time -- I would ask the minister where we go from here.

2:30 p.m.

There are two major pending projects. One happens to be the garbage site in my riding, where the courts have ruled that environmental assessment does apply and the minister has to decide whether he is going to attempt it. The other one is the second line out of Bruce.

Mr. Speaker: This is a speech. This is not really a question.

Mr. J. Reed: I would ask the minister what he is going to do about the necessity for the second line out of Bruce which has got to happen by about 1983. Is he going to undertake the same kind of pattern that is emerging here?

Hon. Mr. Parrott: Mr. Speaker, I think it should be very clear that when this act was brought in it said in section 41(f), if the member wishes to check it out, that what we are doing is precisely what is permissible under the act. If someone says “Obey the law,” and I will not refer to anyone in particular who said that, indeed we are doing that. Let us not be in any doubt about that whatsoever. The act very clearly says we are in total conformity with it.

Mr. Nixon: What about the intent of the law?

Hon. Mr. Parrott: If the member wants to talk about the intent of the law, then let us look at what has happened. If he wants to know what has happened in the past and what will happen in the future, I think most people understand that what has happened in the past will likely be the best indication of what will happen in the future. There have been, by far, a greater number of assessments of various projects in the last two years than ever before. The member can be assured this process is alive and well and working.

The great part about it, and I am going to say this dozens of times because it may take that many times to get through to the member, is that the Environmental Assessment Act is very clearly one that requires consultation. That has been going on very significantly in the last two years, and it will in the future. That act is very much alive and very much in force, and will continue to be so.

Mr. Isaacs: Final supplementary, Mr. Speaker: If the Environmental Assessment Act is alive and well and working, why not hold a hearing under it on South Cayuga?

Hon. Mr. Parrott: Mr. Speaker, there comes a time when I think I can only repeat the answer so often. I have given it in my statement, I have given it in reply to questions here previously, and I would refer the member back to Hansard to read it the three or four times I have said it on the record.

SOCIAL STUDIES CURRICULUM GUIDELINES

Mr. Cassidy: Mr. Speaker, I have another question about the capacity or the willingness of the government to listen, and in particular to take an impartial rather than a one-sided approach. This question is to the Minister of Education.

Could the Minister of Education explain why it is that over the course of a year and a half there has been extensive consultation with groups such as the Toronto Board of Trade, the Canadian Manufacturers’ Association and local chambers of commerce on the grade seven and eight curriculum unit entitled Social Reform, Trade Unionism and Women’s Suffrage? Why is it that business groups such as the CMA and the chambers of commerce have been extensively consulted, but the minister has repeatedly refused to have any form of consultation with reputable labour groups such as the labour liaison committee of the Toronto Board of Education or the education department of the Ontario Federation of Labour?

Hon. Miss Stephenson: Mr. Speaker, it is my understanding there was participation of the Ontario Federation of Labour in the development of the curriculum guidelines which were established approximately two and a half years ago, I believe, for social studies in that area. There is a very specific segment within those guidelines related to the development of labour within Canada and Ontario. That was a significant addition to that curriculum and one in which there was a good deal of participation and consultation with organized labour in its development. There has not been any consultation at all, to my knowledge, with either the CMA or the boards of trade. I have not had any consultations with any of those groups on that subject.

Mr. Cassidy: Supplementary: I have correspondence here which shows there was extensive consultation back in 1979 with various boards of trade and chambers of commerce, which put comments in to the minister such as the following -- this is a quote from the board of trade that was passed to the minister through Mr. Storey: “The study of trade unions should not be part of any history course unless the message is that unions ruin a country.”

Why is the minister prepared to allow that kind of one-sided consultation when consistently, for more than a year, she has refused to have any kind of contact between people in the labour movement and the people who develop this course, in order to allow the trade unions and people representing organized workers across the province to contribute to the development of this curriculum unit? Why is she so one-sided?

Hon. Miss Stephenson: Mr. Speaker, I am afraid the one-sidedness is in the direction in which the honourable member is suggesting that it did not happen. There was indeed consultation with the labour movement in that development.

I have not consulted with the board of trade about this topic. We have consulted with the board of trade about opportunities for teacher experience within the business world and with the CMA about co-operative education. It has not been specifically about the curriculum content of the labour studies segment of the social studies program.

Mr. Cassidy: It is right here.

Hon. Miss Stephenson: That is not what my meeting --

Mr. Speaker: Order.

Hon. Miss Stephenson: Mr. Speaker, I am sorry. That may have been in a communication from those organizations, but it was not the matter under discussion when I had two meetings with the board of trade about cooperative education, nor was it in any way the topic under discussion at the meeting I had with some representatives of business who were not necessarily members of the CMA.

They wished to discuss the possibility of including some curriculum related to the establishment of the entrepreneurial spirit in Canada and in Ontario. The member does not know what he is talking about, because he was not there.

Mr. Cassidy: I certainly do, Mr. Speaker. I have here the correspondence signed by Mr. J. E. Doris, education officer, curriculum branch, saying specifically, “Subsequently, I sent them six copies of our proposed support document for their study in advance of our meeting on February 6” -- six copies of the proposal for this curriculum unit, after they had communicated with the ministry and suggested that Social Reform, Trade Unionism and Women’s Suffrage should not be part of the history curriculum.

How can the minister get up in this House and say something which she knows to be untrue, when the documents indicate quite clearly that there was substantial consultation with the board of trade and other business groups while the ministry was refusing to have any contact at all with representatives of the labour movement?

Hon. Miss Stephenson: That is not what the honourable member suggested. He suggested I had refused to meet with them. I have not refused to meet with any of them. I have met, as I suggested, with the board of trade representatives about a different subject, not about the curriculum development in that specific area.

If they met with the group which had, in fact, been responsible for the development of that curriculum, that is perfectly fine. I can understand there might have been some concern that the Ontario Federation of Labour had not met with the minister, because I have not met with the OFL. I have met with the Board of Trade about other subjects, but not about that curriculum. That is the question the member asked me.

Mr. Speaker: We have spent 32 minutes on leaders’ questions. I think that is entirely out of proportion.

DETERRENT SENTENCES

Mr. Ruston: Mr. Speaker, I have a question of the Provincial Secretary for Justice. I asked the minister on Friday about sentences with regard to people breaking into homes and crimes against people. I wonder if the minister is aware that there is a real concern on the part of many people, not only in the area I am talking about -- and I am getting resolutions from many councils -- but right in Metropolitan Toronto, where people are getting fearful in their homes because of the number of break-ins taking place. What is the Provincial Secretary for Justice going to do?

Hon. Mr. Walker: Mr. Speaker, I think it is more a question of a police investigation. It is certainly a matter for local municipal police forces to enforce the law. Obviously they are going to put every effort towards avoiding any kind of burglaries of this sort. I know there are certain crackdowns occurring in a number of cities, and I am sure this is one city where it probably has started, if the pressure has developed to this point.

Mr. Ruston: What the minister says is fine, and the police are probably doing their job. But the concern the police have is over sentencing. When they do take these people to court they are either dismissed or given probation, or a slap of the hand on the back of the neck; they may not even get that. It is time something was done to straighten this out.

2:40 p.m.

Hon. Mr. Walker: The sentencing patterns in Ontario are established basically by the Supreme Court. That percolates down to the lower courts and they take their precedent from the higher courts. It is a matter of whether or not the Supreme Court would be changing its sentencing patterns to reflect what the member is suggesting and indicating, that lengthier sentences would perhaps cause more deterrence to this kind of event. One thing lengthier sentences would do would be to take more people off the street who might otherwise have been committing burglary.

ITALIAN EARTHQUAKE

Mr. Grande: Mr. Speaker, my question is to the Premier regarding the tragic catastrophe that occurred in southern Italy last week. The earthquake left approximately 10,000 dead and 400,000 homeless. The latest decision by the federal government was not to allow immigration into Canada of all the earthquake victims who may wish to apply to come here but only those who had made an application prior to the earthquake and those who have close family in Canada. I recognize that immigration is not under provincial jurisdiction, but will the Premier join with me in making strong representation to the federal government to rethink its position? Would he urge it to allow entry into our country of all the earthquake victims who wish to come, whether or not they have close family ties in Canada?

Hon. Mr. Davis: Mr. Speaker, as the honourable member very properly pointed out, the question of immigration policy is the responsibility of the government of Canada. As I understand it, the approach it has taken is to accept those who are close relatives and who have a relationship with existing families here. Whether this should extend to a much broader scope, quite frankly I would doubt the government of Canada really has given careful consideration yet. Certainly we are quite prepared to discuss it here, but I do emphasize to the member that judgement will be made by the government of Canada.

Mr. Grande: I hope I did not hear the Premier say he is not going to make representation to the federal government. Hoping I did not hear that, in his representation will the Premier suggest to the federal government that it allow sponsorship of people into Canada who do not have close family ties in this country? Further, will the Premier suggest to his federal counterparts that talks should begin immediately with the United States urging that country to follow a similar procedure?

Hon. Mr. Davis: The member really is asking me to try to determine what the government of Canada might do in relationship with the United States. I cannot really resolve that --

Mr. M. N. Davison: He is asking you to use your influence.

Mr. Laughren: You have a lot of influence with them.

Hon. Mr. Davis: No, no. I am just saying what he is asking me to do. I think it is fair to state the member heard my answer correctly the first time. I did not say I would not.

Mr. S. Smith: By way of supplementary, Mr. Speaker, will the Premier consider making the following suggestion to the government of Canada: Inasmuch as most of the expenditure for schooling, health and so on would be a provincial expenditure, will he consider making the suggestion that there be an extended visitor status offered to victims of the earthquake even if they have distant relatives in Canada? Then people could come for a period, let us say, of two to three years while rebuilding and resettlement is taking place in Italy. They would be able to stay longer than the usual time a visitor is permitted to stay and be able to take part-time work and to attend school here. This would be on the basis that they would not have to pass the usual rigorous tests that permanent immigrants would have to pass. Would the Premier be willing to suggest to the government a more flexible extended visitor status for some of the victims of the earthquake?

Hon. Mr. Davis: Mr. Speaker, the Minister of Intergovernmental Affairs (Mr. Wells) was meeting with the committee this morning related to a number of issues. I chatted with some of them the other day and I would think that perhaps at this moment it is still a shade premature to make some of these judgements.

From this government’s perspective, we will be quite prepared to co-operate with the government of Canada on any initiatives. In fairness to the government of Canada, it has already started some initiatives in the area of immigration. How far it should be extended is something about which we would not want to make a judgement without consultation with federal officials.

Mr. Lupusella: Supplementary, Mr. Speaker: May I recommend the Premier to consider sending a delegation of members from the three parties to Italy to assess and report on the general situation in the three Italian regions affected by the earthquake so as to determine in what way the money allocated by Ontario to the earthquake relief fund can be spent as soon as possible to alleviate the economic and social problems faced by the survivors?

Hon. Mr. Davis: Mr. Speaker, this government is working with the responsible committee in Metropolitan Toronto. We think this is the best vehicle and we will continue to work through it in terms of what assistance we may be able to offer.

EDUCATIONAL TELEVISION

Mr. T. P. Reid: Mr. Speaker, I have a question for the Minister of Culture and Recreation in regard to educational television. In view of the minister’s recent announcement about extension of services into Owen Sound and other areas, can he indicate to us when he is going to extend educational television services to the rest of northern Ontario, particularly the Rainy River district and, for my friend the Minister of Northern Affairs (Mr. Bernier), Kenora as well?

Hon. Mr. Baetz: Mr. Speaker, as I indicated some weeks ago in the House, in the not too distant future we are planning to extend educational television to one or two more areas via the conventional route. However, as I also indicated several weeks ago in the House, it will be difficult and uneconomical to extend via the conventional route to areas that are less populated.

We think those areas will be better served through the new technology that is going to take off with the launching of the Anik C satellite. Essentially, it will follow the lines we have adopted now for the Rainy River area. As I am sure the honourable member knows, in the Rainy River area we are now taking signals from the Anik B satellite that are received by a dish and extended for a small radius around Rainy River. We feel that is going to be the most effective way by far to get the excellent TVOntario programs to areas like Rainy River and all the communities throughout northern Ontario.

Anik C is not going up until 1983. In the meantime, we will continue, on an experimental basis, as we are doing in Rainy River and some other areas now.

Mr. T. P. Reid: I would like to add Lake Nipigon riding to the list for my silent friend, the member for Lake Nipigon (Mr. Stokes).

Since Anik C is not going to be operating until some time in 1983 at least and since, in a conversation with Mr. Parr of educational television a few months ago, he indicated almost the whole region could be covered for something in the neighbourhood of $1 million or $1.5 million and, since the Minister of Northern Affairs has $400,000 or more in his budget for this sort of thing, can the minister not speed up the process so we do not have to wait until after 1983 and can be serviced like most of the province within six months or a year?

Hon. Mr. Baetz: I would not want to hold out any specific promises along the lines suggested by the member. What I can say is we will try to continue the experimental program utilizing the Anik B satellite that is now in about 47 different locations across northern Ontario. It is our hope we will have federal authorization to carry on with that experiment, which was to have terminated in February 1981, for another 15 or 18 months beyond that, which will get us very close to the launching of Anik C.

2:50 p.m.

I really think the answer for the more sparsely settled parts of this province, which includes more than just northern Ontario of course, it includes eastern Ontario as well, really lies in the new technology which TVOntario is the world leader in experimenting in.

Mr. Speaker: As a supplementary answer, just because the member for Rainy River does not hear me, it does not mean I am silent.

LIQUID INDUSTRIAL WASTE

Mr. Isaacs: Mr. Speaker, I have a question for the Minister of the Environment. Now that he has recognized the need for a crown corporation to deal with liquid industrial waste, what is the minister’s attitude towards projects such as Harwich, Thorold, Ajax or others not yet in the public domain, for which private operators or local governments may, on their own, continue to press? Is he going to give some words of encouragement or words to those operators that they need not bother because the crown corporation will handle everything?

Hon. Mr. Parrott: Mr. Speaker, as I tried to assess the situation, people are extremely pleased that there will be a crown corporation; they are extremely pleased that it will be government run, if you will, through the corporation site; that there will be lab facilities; that there will be tight controls on the gate; it will be fenced in and it will have 24-hour surveillance. All of those things have met with a great deal of public acceptance.

It is easy to forget that large portions have caught the attention and the approval of the public and there is no doubt on any side that is true. I am pleased members recognize that perhaps two thirds or more, perhaps 75 per cent, of the proposal does have a great deal of public acceptance and I am very pleased about that.

Having said that, we intend to see that the site is run to the very best. If somebody else wishes to apply, however, I cannot tell them no. I think anyone would clearly understand that we are taking on that commitment in a site that gives us the greatest opportunity to do it to the very best and I think that is obviously a clear signal. If the member wants me to say to someone that they cannot, would not be able to, well of course I do not have that privilege. It is their determination, but if anyone should have any trouble reading that signal, I am afraid they are not very attentive.

Mr. Isaacs: On the matter of the one that is of most immediate decision, why is the minister meeting on Wednesday with the chairman of the regional municipality and with the local member, when the Environmental Assessment Board draft report, which is the report he has said he will take note of in future, so clearly recommends against that proposal? Is the minister going to that meeting to tell them he thinks that project should not proceed?

Hon. Mr. Parrott: I sometimes wonder whether we need a new sound system in this place -- and we have just had one.

Mr. Speaker, let me read the paragraph which said it very clearly, and I will read every word the same as I did before.

“I have discussed the issue with Mr. Walter Beath, the outgoing regional chairman, and the local MPP, the member for Durham West (Mr. Ashe). As a result, I have arranged for a meeting Thursday with the director, the member for Durham West and the new regional chairman ... ” Not any place in that statement do I say they are meeting with me. They are not going to be meeting with me on Thursday. I have arranged the meeting between the director, the member and the regional chairman, who is yet to be named, and that will occur on Wednesday. We will try to announce the results of that meeting on Thursday. He asked for it to be held as soon as possible.

Mr. Speaker, may I make sure I didn’t short change the member? The regional chairman is to be appointed on Wednesday, and the meeting will be on Thursday. The regional chairman is to be appointed Wednesday.

MINISTRY SETTLEMENT

Mr. Stong: Mr. Speaker, I have a question of the Minister of the Environment as well. Would the minister reopen the settlement negotiated between his ministry and Evans Contracting Limited in Markham, a company which contracted with his ministry to construct a sewage lagoon in Temagami, but because of the tactics used by officials in the ministry, which are nothing less than economic blackmail, it forced that company to its knees? Will the minister settle this account with his ministry?

It has caused a consulting firm to observe in a letter to the Ombudsman that the minister is using arbitration as a tool to soften up claimants and, by tying up one’s capital in a dispute, the claimant’s chances of survival are lessened. In other words, by dragging out a settlement artificially, as was done in this case, a small contractor with modest means will either go bankrupt before the conclusion of the dispute or will be forced to accept a totally inadequate settlement, as was done in this case, reducing the claim from $400,000 to a little over $100,000.

Hon. Mr. Parrott: Mr. Speaker, I think I heard the member say that was before the Ombudsman. I suspect he has already contacted our office and we have made our files available to him. I think that is the appropriate course of action. I do not associate myself with very many of the remarks made by the member, but when it is before the Ombudsman I think we should let him deal with it. I am sure the member would agree that is the way justice is done in this province.

Mr. Stong: Would the minister assure this House that his ministry officials are not employing tactics that are equivalent to economic blackmail in the settlement of accounts of small contractors with his ministry?

Hon. Mr. Parrott: I can assure the member of that very quickly. Indeed, I have found on many occasions that an extra meeting is held in an attempt to explain the situation. We are dealing in an area where contractors sometimes do run into difficulties through no fault of their own, certainly through no fault of the ministry and through no fault of the consulting engineers. I have seen several cases where that has happened. That will likely always happen when an individual is doing a contract where not all of the factors can be identified when bidding for a contract. If the member wants assurance that my ministry will continue to work with those contractors in a fair and equitable manner, he has it.

HALDIMAND CHILDREN’S AID SOCIETY

Mr. McClellan: I have a question of the Minister of Community and Social Services, Mr. Speaker. I have a copy of the final report of the operational review of the Haldimand Children’s Aid Society, which indicates on page three that in March 1979 the agency was in a state of crisis. On pages 64 and 65, it indicates it was in violation of at least seven provisions of the Child Welfare Act.

My question of the minister has to do with the Butler family who have had their three children apprehended, taken into care and subsequently denied any opportunity for the provision of family counselling and, therefore, an opportunity for rehabilitation. Is the minister familiar with this case? Also, can he report to the House any action he may have taken? I would plead with him to intervene in this situation. Can he arrange that jurisdiction be transferred in this case from Haldimand to Brantford so that the kind of services this family is entitled to under the Child Welfare Act can be provided?

Hon. Mr. Norton: Mr. Speaker, I do have some degree of familiarity with the case the honourable member raises with me. At this point, though, I would say my information is somewhat preliminary. I am awaiting the results of a further investigation on the part of my staff, which I hope to receive within the next couple of days.

Perhaps at this point I would indicate to the member, as I am sure he is aware, that there are some aspects of that case which are currently under appeal before the Supreme Court. I would not wish to discuss the specifics relating to that, as the society is not at this time doing so on the advice of its solicitor. However, I can assure the member, at least on the basis of the information I have received, that the suggestion there were no attempts made to assist the family by way of counselling would not appear to be accurate. I have a list of at least eight different occasions on which counselling of one form or another was recommended to the family. In some instances it was begun tentatively, but in no case was it followed through. In some instances the advice was apparently not accepted by the family. I can answer that with greater definitiveness only when I receive the full report.

3 p.m.

Mr. Makarchuk: Supplementary, Mr. Speaker: In view of the fact the minister says that counselling was not desired or attempted by the family, a statement I believe is not correct -- the family has tried to obtain counselling but the point is the counselling was not as useful because the children were not in the hands of the family and no counsellor was prepared to accept the possibility of counselling them without the children -- would the minister ensure that the children are available to the family for purposes of counselling? Could he also explain why, when this family has been after him for almost a year to resolve the case, it has only been recently, when the issue appeared in the paper, that he has started to move and examine it and do something about it?

Hon. Mr. Norton: Mr. Speaker, that is not quite accurate. I think the honourable member has to recognize that where matters are before the courts for determination that does somewhat limit my ability to deal with cases of the requested persons who are litigants before the court. Surely he understands that.

I also think it is fair to say, on the basis at least of the preliminary information I have, in spite of the fact that yes, at the time of that operational review there were some real concerns about that society, the evidence I have seen to date would indicate that, in spite of that situation, in this particular case it would appear they did handle the case competently.

As far as the member’s request that I in some way at this time intervene with respect to the question of the children, I think I would have to reserve on that until I receive some further legal advice myself. As he is aware, I think, when the case was appealed to the county court fairly recently, the result of that appeal was not only that the matter of the wardship of the children was upheld on the same basis as I understand it, as the earlier court decision, but in addition to that the court took the further step and made the provision for access much more restrictive. In fact, I believe it prohibited access on the part of the parents to two of the children. I do not really think, faced with that quite recent decision from the court, it would be appropriate for me to take any action at this point until I have a fuller report on the details of the case.

Mr. Speaker: The same minister has the answer to another question asked previously.

PENSIONS FOR WOMEN

Hon. Mr. Norton: Mr. Speaker, I gather on Friday in my absence a question was directed by the leader of the New Democratic Party to the Premier, relating to the statements attributed in the press recently to the Honourable Monique Begin with regard to some proposed changes in the Canada pension plan.

First of all, I want to assure the honourable member that to date my only knowledge of those proposals is through the press as well. We have had no formal communication with the Minister of National Health and Welfare on the specifics of her proposals.

The other thing I would point out is we do have a federal-provincial conference of ministers of social services next week, beginning Sunday evening going over Monday and Tuesday, and I anticipate that will be one of the items on the agenda for those meetings.

Having indicated that I am not really familiar with the specifics other than through the press, I think it is important on the basis at least of the press reports to note that what is being proposed now by the federal government is really something quite substantially different from what was proposed in 1976, in so far as the proposals now suggest a voluntary contribution to be made by any spouse who is working in the home. In 1976, there was a dropout provision whereby persons might drop out for substantial periods of time for purposes of child-rearing and not use those years of low or no income in the calculation of their benefits.

It is true at that time British Columbia and Ontario had some grave reservations about that proposal. One of them was, under the previous proposal, in terms of the benefits, recognizing that a substantial increase in the subsidy component of the Canada pension plan would have been necessary to maintain them, because it was a divergence from the insurance principle. One of our concerns was that high income women would be subsidized much more substantially than would low income families or women. We felt that was an inequity in terms of the subsidy by way of public funds which was prejudicial towards low income families.

The present proposal, at least superficially on the basis of very limited information through the press, would appear to move away somewhat from that principle I think. It would seem to be more consistent with the insurance principle of the Canada pension plan. But I really think I would have to reserve any further judgement on it until I have had a chance to discuss it with the Minister of National Health and Welfare, as I expect I will next week.

Mr. Speaker: Due to the rambling nature of the last two answers, I am going to allow one more question from the Liberal Party and one more from the New Democratic Party. The minister said he had nothing further to add to his last two answers until he received more information on the federal program and on the children’s aid program in Brantford and some other place. I will hear one question from the Liberal Party and one from the New Democratic Party.

Mr. Sweeney: A question to the Minister of Colleges and Universities please, Mr. Speaker --

Mr. Cassidy: On a point of order, Mr. Speaker --

Mr. Speaker: There is nothing out of order.

It is the responsibility of the chair to determine when an answer has gone on long enough and whether a supplementary is appropriate. I can call the question period over if you want.

Mr. Sweeney: Thank you, Mr. Speaker. I did not think you would do that.

UNIVERSITY STUDY

Mr. Sweeney: I have a question for the Minister of Colleges and Universities. My reference is to the statements of the minister on November 18 and 28 and her reference to a study that is going to be done to determine the objectives and the funding of the Ontario universities. The opening in that statement clearly says the objectives, as set out by the government of Ontario for the universities, cannot be met with the existing level of funding and that maybe now it is time to scale down that objective to match the level of funding. In view of that, just how far is the ministry or the government prepared to scale down the objectives of the universities of Ontario to match the funding they are prepared to give to the universities?

Hon. Miss Stephenson: Mr. Speaker, the reference the honourable member raises is, I believe, contained in a document produced by the presidents of universities as a committee of the Council of Ontario Universities. That has certainly not been the government of Ontario’s position. That is one point of view which is being presented by COU and it is one which will have to be considered in the deliberations of the tripartite committee.

At this point, the government has made no commitments to any modification nor will it until it has participated fully in these discussions and until a decision has been taken within a report which will then be discussed broadly throughout the community regarding the aspirations, objectives and goals of the university system. There is no commitment to any modification at this point -- only to participation within that committee.

ACTIONS OF RCMP OFFICERS

Mr. Warner: Mr. Speaker, in the absence of the Attorney General (Mr. McMurtry), I wish to ask the Provincial Secretary for Justice a question. Will the Attorney General be investigating the actions of certain RCMP officers who entered the apartment of Mr. and Mrs. Bains approximately 10 days ago, in an effort to determine if charges of wilful damage or any other charges related to the incident should be laid against the RCMP officers? Will the Attorney General be making a full report on this incident to the assembly before the week is out?

Hon. Mr. Walker: Mr. Speaker, I cannot answer that question but I will see that the matter of Mr. and Mrs. Bains is referred directly to the Attorney General. At this moment, he is attending a conference on highway accidents. I am sure he will report in due course, if not to the Legislature perhaps directly to the member.

ANSWERS TO QUESTIONS

Mr. Stong: Mr. Speaker, on October 24 I placed two questions on the Notice Paper in writing, one to the Minister of Education and one to the Premier. I was made aware of an interim answer from the Minister of Education only on November 6, which requested more time to answer my two questions. In an informal agreement with the Minister of Education, I had indicated I would accept an answer from her a week ago today, but neither of these questions, questions 368 and 369, has been answered to date, although they have been on the Notice Paper.

3:10 p.m.

In addition to the flagrant abuse by both ministers of the parliamentary rules of procedure set out for us, could the record also show that both ministers have steadfastly refused to answer my question so that the constituents of the good riding of York Centre may realize that both ministers have relinquished any interest in unseating this member?

Hon. Mr. Davis: Mr. Speaker, in reply to the point of order -- I just looked at it now -- I know exactly why the honourable member is trying to ascertain the information, that is, to protect his seat, knowing full well he is in great jeopardy in any event.

Mr. Stong: That is not the answer.

Hon. Mr. Davis: Oh yes, it is.

Mr. Swart: On a point of privilege, Mr. Speaker: Five weeks ago I asked a question of the Minister of Consumer and Commercial Relations (Mr. Drea) regarding the increase in the price of ethylene glycol in this province. To date, I have received no answer. I realize sometimes he is reluctant to answer certain questions. Would you intervene on my behalf to see if you can get an answer from the minister?

Mr. Speaker: Was it an inquiry of the ministry?

Mr. Swart: No. It was an oral question.

Mr. Speaker: I have no control over that at all.

INTRODUCTION OF BILLS

ITALIAN CANADIAN BENEVOLENT CORPORATION ACT

Mr. J. A. Taylor, on behalf of Mr. Rotenberg, moved first reading of Bill Pr42, An Act respecting the Italian Canadian Benevolent Corporation.

Motion agreed to.

MCCOLL FARMS LIMITED ACT

Mr. Watson moved first reading of Bill Pr53, An Act to revive McColl Farms Limited.

Motion agreed to.

ASSESSMENT AMENDMENT ACT

Mr. Philip moved first reading of Bill 211, An Act to amend the Assessment Act.

Motion agreed to.

Mr. Philip: Mr. Speaker, the purpose of this bill is to exempt some home improvements from assessment under the Assessment Act. Home improvements are exempt if the improvements do not enlarge the living space of the home and if the cost of materials for the improvement does not exceed $10,000.

RESIDENTIAL TENANCIES AMENDMENT ACT

Mr. Philip moved first reading of Bill 212, An Act to amend the Residential Tenancies Act, 1979.

Motion agreed to.

Mr. Philip: Mr. Speaker, the purpose of this bill is to revise the manner of calculating interest on rent deposits under the Residential Tenancies Act, 1979.

ORDERS OF THE DAY

House in committee of supply.

ESTIMATES, MINISTRY OF REVENUE

Hon. Mr. Maeck: With your permission, Mr. Chairman, I would like to move down to the front row.

Mr. Chairman: Feel free to do so.

Hon. Mr. Maeck: This is probably as close as I will get to the front row, so I am going to enjoy myself while I am here.

I am pleased today to present the 1980-81 estimates for the Ministry of Revenue and once again to have the opportunity to review the ministry’s operations with this committee.

One year ago, in the introduction to my presentation of the Ministry of Revenue’s 1979-80 estimates, I drew the committee’s attention to a number of significant developments occurring within the ministry and, again this year, I believe a similar review of the ministry’s activity in a number of particular areas would be of considerable benefit to the members before we turn to detailed examination of the estimates.

Specifically, I shall be referring to four items: The continued financing and productivity improvements in the ministry; the successful introduction of the new Ontario tax grants for seniors program; a wide range of improved customer service tax simplification and related administrative developments within our tax revenue program; and significant progress in municipal property assessment.

I will deal with the overall financing and productivity improvements in the ministry first. As all members are aware, for the past five years the government of Ontario has followed a policy of restraining spending and of reducing the size of the public service. This policy has been, in part, a recognition of the need to fight inflation, but it also had the objective of improving the balance between the private and public sectors in the province.

This well-established policy has had considerable success and I am pleased to be able to say that the Ministry of Revenue has played its part. In this connection, I would like to draw your attention to the human resources summary and expenditure summary tables at the beginning of the briefing material you have before you.

The human resources table describes planned employment for 1980-81 compared with last year by major program. The table shows that, overall, the ministry plans to reduce its level of staffing by 42 man-years in 1980-81. I emphasize the word “planned” because, as members will note, actual level of staff employed is likely to be somewhat lower.

The second table to which I referred describes 1980-81 estimates spending compared to last year’s actual spending, again by major program. This table shows that for 1980-81 the ministry’s estimates are down by over $1 million. This reduction is clearly influenced, however, by lower total levels of payments under the Gains program and, for this reason, I would like to draw your attention to the changes in spending in these categories over which the ministry has more direct control.

Salaries are down by over $1.5 million or two per cent. This reduction reflects, in part, the lower level of staffing which I mentioned earlier. Travel services and supplies show an increase of just less than 15 per cent. This area is subject to some sharp inflationary cost increases. However, a significant portion of the increase in spending has been caused by the investment of funds in new systems and methods.

3:20 p.m.

The result is that despite inflation and higher levels of spending on new systems. the estimates of the ministry have increased by only $1.9 million, or less than one per cent. Even if we were to include potential salary award claims, the increase is a modest seven per cent. In view of this, I believe I am fully justified in once more declaring that the Ministry of Revenue is exercising real restraint, and that its 1980-81 estimates are essential level lines.

While emphasizing that the ministry’s expenditures are being constrained in line with overall government policy, it is important to stress that constraints have been effected despite continuing increases in the volume and complexity of program work loads. This has been accomplished by a concerted and ongoing emphasis upon methods to improve productivity. This improvement in operating efficiency has been made possible by exploiting opportunities for investment in computer systems to utilize available manpower resources more effectively and by improving management techniques of resource planning and control.

In my statement last year, I informed members of what the ministry was doing in these management areas. I would now like to update members on similar developments over this past year.

In 1976, Management Board of Cabinet approved the introduction of the management by results system, or MBR as it is known in short form, as a basic tool to be used by all ministries in measuring and reporting on how their programs perform during the fiscal year against stated objectives.

After two years of experience with MBR, the ministry introduced zero-base budgeting, or ZBB, as a complement to the MBR system. It was felt that a systematic method of defining objectives and allocating resources was necessary to obtain full benefits from the MBR process. The result is a system in which the ZBB exercise rations the resources and sets program targets, while the MBR system monitors actual performance during the year. For 1980-81 the ministry has made much progress in integrating the two systems, such that ministry managers are aware that in addition to estimating costs and outputs of programs, those estimates will be compared with actual results. In other words, the internal operations of the ministry are under close scrutiny to get the very best results.

The resource planning and management systems used by the ministry in preparing the annual estimates are explained in more detail in the manuals that are included in the briefing material for members this year. These will explain what we have done for 1980-81 and what we plan to do for 1981-82.

I want to turn now to the Ontario tax grants for seniors program. The program for senior citizens announced in the Treasurer’s (Mr. F. S. Miller) April budget has had a major impact on ministry operations over the past seven months. I would like to take a few moments to discuss that impact and the current status of payments under the program, as well as our plans for the balance of the fiscal year. To begin, I think it is worth while to look at the magnitude of the undertaking. There are, in this province, well over 800,000 senior citizens. As of July, 820,000 Ontario residents were receiving federal old age security pensions. In addition, there were estimated to be 10,000 more seniors who did not have sufficient Canadian residency to qualify for OAS.

For 1980, we anticipate paying up to $550,000 in property tax grants and at least $830,000 in sales tax grants. The original estimate for grant payments under this program was $255 million. However, it now appears that with the inclusion of seniors who do not qualify for OAS, that figure will increase by $2.5 million more, which would bring it up to $257.5 million.

Obviously, given the scope of the program, both in terms of payments to be made and the dollar value of those payments, the central element was the design of a program delivery system to enable us to send program information, application forms and instructions to those persons who were potentially eligible for benefits. We then had to receive back those applications, process them and produce property tax grant cheques. In the case of the sales tax grants, the process was somewhat similar, except for non-OAS seniors, no application was required.

I would be remiss if I did not mention the fact that the program would have been much more difficult to introduce, certainly within the time frames we were looking for, had it not been for the co-operation of Health and Welfare Canada. Without their agreement to allow us to use their old age security data as the basis of our tax grants master file, we would have had to construct that file from scratch or, at the very least, from much less complete information obtained from other sources.

Although this description tends to simplify somewhat the various steps involved, we created a grant master file of all Ontario pensioners in receipt of old age security as of July. To the persons on that file, we mailed out at the beginning of August a pamphlet giving basic program information. In mid-August we produced 727,000 personalized property tax grant applications on which the name, address and OAS or social insurance number of each pensioner were preprinted.

In the case of married pensioner couples who were currently receiving -- or at some time in the past had received -- the guaranteed income supplement, only one application was produced with the names of both pensioners printed on it. We could not do this for all couples because the federal OAS file does not, as a general rule, link spouses unless the couple has at some point applied for the supplement.

Besides the program delivery system, the next most important element was our information campaign. The overall objective of that campaign was to make senior citizens aware of the grant program, what action they had to take to obtain their grants, and how they could go about getting additional information if they required it. Many seniors, however, rely on sons or daughters, friends, community groups or information centres to help them complete forms. Consequently, while our information was targeted to persons over 65, we also wanted to inform this larger group about the program. To do this, we used a variety of information methods.

In early August, we mailed to all OAS pensioners a pamphlet outlining the major features of the program. The main purpose of the pamphlet was not to explain the grants in any detail -- which obviously a pamphlet of that nature cannot do. Rather, it was to inform seniors that a property tax grant application would be mailed to them shortly and their sales tax grant cheques would be going out automatically in September. These general messages were reinforced with television advertising. Newspaper ads providing more specific information were placed in dailies, weeklies and the ethnic press, and the advertising part of the communications plan was rounded out with radio spots and transit cards.

In addition to the pamphlet and advertising, we produced detailed grant information guides and provided them to members, their constituency offices, senior citizen information centres, Ministry of Revenue field offices and other government offices. Information officers participated in more than 100 speaking engagements, newspaper interviews, radio and TV interviews and open line shows across the province.

Certainly, the success of our advertising in reaching senior citizens was proved by the speed with which property tax grant applications came back to us during the last week in August. By the end of that week we had 173,000 applications returned, and by September 5, 347,000 applications had been received. The majority of these were completed correctly and could be processed quickly. In fact, we mailed 205,000 property tax grants out on September 17 and a further 125,000 on October 8. Of the 125,000, approximately 100,000 cheques could have been mailed earlier except for threatened postal disruptions and our concern that if parts of the Post Office were shut down as they had been earlier in September, the cheques could be locked in for a considerable period of rime.

One difficulty with any new program that involves completion of a form is that a percentage of people do not fill it out completely, do not sign it, or they make some mistake in completing it. I think this is particularly true in the first year of any program for two reasons.

First, the form is unfamiliar to the people filling it in. Second, the designing of forms and the writing of instructions are more of an art than a science. I have no doubt that we will change some of the wording in the instructions for 1981. Certainly, staff will closely analyse the kinds of mistakes people made this year with a view to changes that will cut down the errors next year. In this regard, the Advisory Council on Senior Citizens has already made some recommendations to me and we will be looking at those very carefully.

3:30 p.m.

Applications which could not be quickly approved in the vetting section where initial processing was done were put into the prepayment review unit for further action. Depending on the deficiency involved, some of these applications could subsequently be approved without the need for any further contact with the applicant. Others, however, required a phone call or a letter to obtain additional information and some applications had to be sent back for signature by the applicant, the applicant’s spouse, or sometimes both.

Of the more than 520,000 applications received to date, close to 200,000 could not be approved in initial processing. In 54 per cent of these cases, the problem centred on the reporting of property tax or rent. The most common deficiency in this group was that although the application was fully completed in all other respects, the amount of property tax or rent incurred was not filled in on the form. In rental situations, a typical problem with delayed processing was the discrepancy between the rent reported on the face of the application and the rent indicated on the rental statements.

Unsigned applications or applications for married couples, where both spouses were eligible but only one of them signed the form, accounted for a further 18 per cent. Other significant reasons for applications being referred to prepayment review were such things as problems with shared residences, clarification required as to whether the applicant was resident in an institution and thereby not eligible, and spoiled or illegible applications. Approximately 25,000 applications had more than one deficiency or fell into the miscellaneous problem category.

By the middle of September, correctly completed, straightforward applications were being processed on a current basis and some of the staff resources in the vetting section were being shifted over to the prepayment review unit. The process of clearing applications out of this unit into the application-approved category, or into the pending file while we awaited the return of additional information or documentation from the applicant, was a good deal more time-consuming than the simple vetting function. Any apparent discrepancy that looked as if it could be cleared up by a phone call, the staff tried to handle in exactly that manner. Only after they had failed in two or three attempts to reach someone by telephone would they write to the pensioner.

As of October 21, 78,000 applications had been cleared out of the prepayment review, but 113,000 applications remained. Understandably, this large number of applications that had not yet been actioned led to a large number of inquiries, most of which had been in the branch at that point for the better part of a month, and some of which had been mailed by the pensioners in late August or early September.

In fact, the volume of inquiries had been very high since the postal disruption of early September. Initially, when the grant applications were mailed in August, the typical questions being asked of the telephone staff at the information centre were:

“What can I do if the landlord refuses to give me a receipt?” “Do I need monthly receipts for rent I have paid to August or will one receipt for eight months do?” “If I don’t claim the grant, can I claim the tax credits with the income tax instead?” In other words, the questions were largely related to how to go about completing the form or to clarify some aspect of our administrative policy.

In early September, when the postal system was shut down for a period, and continuing throughout that month and into October there was a change in the pattern of the questions. While we still received calls on how to complete the form, a growing number wanted to know such things as:

“How will you get my cheque to me if the Post Office isn’t working?” “Have you got my application? I mailed it just before the strike.”

We could offer some reassurance on the first question, since the contingency plan had been developed to produce cheques in postal code sequence, sort them by assessment region and have the ministry’s regional assessment staff deliver them on a door-to-door basis. On the second question, it was not always possible to give a categorical “yes” or “no,” simply because the volume of applications in various stages of processing was so high.

There was also in this period a group of 16,000 old age security pensioners who had not yet received their property tax grant application. These are persons who receive a combined OAS-Canada pension plan cheque rather than two separate pension cheques each month. That particular computer file was not available to us as early as the main file and, because of differences in file layouts, we were unable to incorporate it into our system until October.

Despite the fact that we had increased the capacity of the telephone information centre to handle a much higher volume of calls than we ordinarily received, which was about 2,700 per day, the system has been overloaded many times over the past three months. We are in much better shape now. Nevertheless, I would point out the best times to call are still early in the morning or late in the afternoon.

I would now like to turn to the two issues which have been the substance of some discussion since the grant legislation was introduced on budget night. The first of these is the fact that with certain specific exceptions, residents of institutions are not eligible for the property tax grant. Some 26,000 senior citizens reside in homes for the aged that are exempt from property tax. Even though these institutions are exempt, residents have been allowed to claim both property and pensioner tax credits since the 1974 taxation year.

Approximately the same number of seniors are in nursing homes. They are privately owned institutions and are subject to property tax. However, the vast majority of nursing home residents have the cost of their stay in the home subsidized under the extended care program. This is a substantial subsidy which at current rates amounts to almost $7,000 per person on an annual basis. Here again, nursing home residents had been allowed to claim the property tax credit since it was introduced in 1972 and the pensioner tax credit since its introduction in 1973.

It is very difficult to withdraw benefits from any group of people, irrespective of whether or not there is a rational case to be made for the continuation of that benefit or whether circumstances have changed significantly since the benefit was introduced. In restructuring and enriching property tax assistance for seniors, we were tying the new grant directly to the payment of property tax. Residents of tax-exempt institutions are already receiving a benefit by virtue of that tax exemption, which is equivalent to the grants being paid to seniors who live in ordinary rental accommodation. For nursing home residents on extended care, the provincial subsidy is already substantial.

Taken together with the fact that the comfort allowance was increased by $10 per month in May and that the federal guaranteed income supplement increase of $35 a month, starting in July, was passed on in its entirety, I do not really believe criticism of this aspect of the program can be justified.

The other major issue, which in part is an extension of the institution question, is that a total of 95,000 senior citizens will receive less money from the two new grants and the guaranteed annual income system enrichment than they would have been entitled to under the tax credit system. We knew this would happen when we brought in the program. It results from establishing a direct relationship between property tax liability and property tax relief.

Just before turning to our future plans for the tax grant administration, I would like to review the current status. We have now paid out 423,000 property tax grants for a total of $180 million. Updates are run on a weekly basis. Last week’s update will produce an additional 20,000 grant cheques for mailing this week. The backlog in the prepayment review unit has been reduced to less than 20,000 applications by the beginning of this week. This speech was written last week, so I am talking about the beginning of last week really. These should all have been actioned by this weekend, which was last weekend. Because I thought I was going to start my debate on Friday of last week, members will understand there may be some changes in the dates here.

By this I mean each applicant will have been contacted either by telephone or letter or that the grants are in the process of being paid. There is still a significant number of applications where processing is being held up pending the receipt of further information from the applicant. But as this information is received, these applications are being processed, together with new applications which are still coming in at the rate of 300 to 400 per day.

In addition to property tax grant applications, we are also processing eligibility applications from seniors who have not been in Canada long enough to qualify for old age security. Once their age and residency have been established, we can pay them the sales tax grant. If they have indicated on the eligibility form that they pay property tax or rent, we will send out a property tax grant application, which is then processed in the same manner as grant applications completed by OAS recipients.

3:40 p.m.

For 1,000 of the estimated 10,000 seniors in the non-OAS group, we were able to avoid this two-stage application procedure because they had already established their ages and residencies for purposes of their family benefits or Gains with our ministry.

The only identifiable group of potential grant recipients which has yet to receive property tax grant applications is those persons turning 65 between July and December, thereby becoming eligible for old age security after the date. We picked up the OAS file from the federal Department of National Health and Welfare. Sales tax grant cheques and property tax grant forms for these persons will be sent out in early January.

With respect to the sales tax grant, we have mailed 820,000 cheques to date involving $41 million in grant payments. As eligibility applications are approved, more of these grants will be going out.

Before I move to the next topic I want to mention that we are currently working on enhancement to our processing system for next year’s applications. I think two of these new features will be of particular interest to members. The first is a logging function. As soon as a property tax grant application has been received back from the pensioner and before it has been processed, an indicator will be put on the file and we will know the application has been returned to us. Second, we will be converting to a data base system with an online inquiry facility. When an inquiry comes in, we will be able to access the file and immediately provide the caller with the current status of his account. This should be very helpful with the next application.

I want to return now to the tax revenue program within the ministry. My remarks respecting the activities of the tax revenue program can be categorized in several major groups: improved planning and management techniques; tax simplification and improved customer service; targets for further improvement and investment in computer systems.

I will deal with improved planning and management techniques first. I spoke earlier regarding the ministry’s use of zero-base budgeting and management by results system techniques to reinforce the effectiveness of program management. This combination has allowed us to ration scarce resources and set precise targets in planning our operations, as well as monitor ongoing performance thereafter and take whatever correcting action might be needed to adjust operations in response to changing conditions or to meet revised priorities.

Since our adoption of the management by results system and zero-base budgeting approach several years ago, we have successfully designed and refined the system.

Ms. Bryden: On a point of order, Mr. Chairman: Is it customary for the minister to supply the opposition critics with a copy of his statement?

Hon. Mr. Maeck: No, I do not think so. Is the member going to supply me with a copy of her statement when she makes her introductory remarks? I do not think it is necessary. We are not introducing a bill. It is necessary if I am introducing a bill.

Mr. Chairman: I believe the standing orders call for ministerial statements prior to question period.

Hon. Mr. Maeck: If I have another copy I will be happy to give it to the member. It is not that I mind her having it. Maybe my staff has another copy of my statement. I could have it sent over if she would like to have one. She can put it in her memoirs.

Ms. Bryden: It would be helpful in the same way as is a ministerial statement supplied before question period.

Hon. Mr. Maeck: I know it does not come under the rules of the House but we will be happy to do it.

In my experience, this new planning system has now reached a fully operational status in the ministry and has proved invaluable in planning the operation in 1980-81 which is expressed in these estimates and which we will be dealing with a little later.

To be able to provide the effective leadership and financial control required when periods of economic uncertainty are coupled with stated goals of expenditure restraint and staff cutbacks, one must place very real reliance on sophisticated working mechanisms. Without them we would not be able to make the advances we have.

If honourable members will turn to the expenditure summary table for the administration of taxes in vote 802, they will see some of the results of the management by results system and zero-based budgeting process in this area.

You will notice there is a fairly substantial increase in the area of services. This increase is due primarily to investment by the various branches in modernizing existing and implementing new computer systems and other technical support facilities. This investment has allowed us to effectively utilize technological resources, thereby reducing our reliance on increased human resources and improving our ability to handle growing numbers of taxpayers in the face of staffing constraints.

The zero-base budgeting process has allowed us to monitor the activities in various sectors and deploy our resources in what we see as the most efficient manner. This tradeoff between investment and staff has, as you can see, resulted in an overall net reduction in staff of 27 man-years. It has also allowed us to hold the line on the cost of collecting revenue. My colleague the Treasurer has estimated that 1980-81 retail sales tax revenues will approach $2.6 billion. The cost of collection for $100 of this revenue will remain unchanged from its 1979-80 value of 59 cents. The cost of collecting $100 of corporation tax, estimated for 1980-81 at about $1.5 billion, will rise a mere one cent to 47 cents. From my experience, I don’t think you can improve on investment ratios such as these.

Revenue has long recognized that tax simplification and improved customer services are mutually beneficial to its clients and the ministry. In March 1978 the ministry moved to intensify its program in line with cabinet instructions. Management procedures were introduced to accelerate the identification and implementation of measures across all programs.

The main achievements: The ministry’s program touches virtually every aspect of its dealings with its taxpaying and its senior citizen clients. Generally it is designed to reduce customer uncertainty, compliance costs and disputes. For the benefit of the members, I will be starting on page 30.

The following are some of the main areas in which measures have been successfully initiated:

Tax banking: It provides small businesses with a more convenient and free way to pay taxes -- via banks -- and it is gaining widespread acceptance at the moment. Tax filing requirements and costs have been reduced for large numbers of taxpayers and many forms and procedures have been simplified or eliminated. Tax rebate and exemption procedures have been simplified. Interest on tax credits has been increased to equal that charged on taxes owing, which is a much fairer way of doing things. Information and advisory services have been extensively redesigned and expanded in all programs for all client groups. Also, the ministry is participating fully in the access program.

Tax disputes: A new advanced tax ruling service reduces uncertainty about taxation of new corporate undertakings. The new tax appeals branch provides an improved system in an independent form for taxpayers to settle tax disputes and we have targets for further improvement. Regulatory reform and improved public services are well established priorities within our ministry. The objective is to maintain the momentum achieved and exploit new opportunities. Again, primary attention will be given to small businesses, senior citizens and other taxpayers.

Investment in computer systems: Previously I mentioned that we have invested heavily in providing enhancement to existing computer facilities. While the results, for the most part, go unnoticed by the tax filer, we have developed some facilities that are readily apparent. Retail sales tax, for example, has developed a system that allows a district office staff to access central computer accounting records via video screen. By providing this capability, they are able to service vendors over the counter, and telephone inquiries not only immediately but with the most current information available.

3:50 p.m.

Computer system enhancements have provided improved customer service in other areas. The gasoline tax branch processes in excess of 60,000 tax refunds in respect of the nontaxable use of the fuel, particularly by farmers. Historically, processing such refunds was a laborious, time-consuming task. The new refund system has not only cut processing time, but is capable of providing cheque stub data, and detailing adjustments and other relevant information, a feature that aids bookkeeping for the claimant. In what might be considered the invisible areas of systems development, all branches have instituted revisions which improve paper processing capabilities and reduce staffing requirements.

I would like now to turn to some discussion on the municipal property assessment. Let me first deal with the section 86 reassessment program. I am sure you are all familiar with the details of this program, so I shall deal with only a few major features. In 1978, the government authorized the Ministry of Revenue to use section 86 of the Assessment Act to correct assessment inequities on a municipality-by-municipality basis. Eventually, this involves the equalization of assessments within property classes, using market value as the base.

This has a number of important features. First, by equalizing property assessments between classes a higher degree of equity is achieved by the elimination of longstanding disparities. Second, by equalizing within specific property classes, tax shifts from the industrial, commercial and multi-residential sectors on to the residential properties are prevented. Third, by implementing equalized assessment within property classes, our assessments become very much more defensible, which in turn protects the municipal tax base. Fourth, because it is implemented only upon the request of the municipality, the decision to implement is under the political control of local councils and the scrutiny of their officials. It will be implemented, therefore, only where there is a strong consensus on the need for reassessment.

Let me turn to our experience with the program. In the first year of the program, which was 1978, 14 municipalities requested implementation. This included a number of municipalities, such as Cambridge and Hamilton, where assessment inequities were severe and which were threatened with significant tax losses through appeals. In the second year of the program, in 1979, the number of implementations increased substantially to 93 municipalities and one area school board in the north. To date this year, 130 more municipalities and school boards will be reassessed under section 86 of the Assessment Act for 1981 taxation purposes.

Clearly, since its inception the section 86 program has continued to gain the acceptance and support of municipalities and school boards. The great majority of mayors and councils of municipalities which have requested section 86 have expressed their satisfaction with the program as an important first step towards comprehensive property assessment and tax reform. Indeed, the Association of Municipalities of Ontario endorsed the section 86 program, urging all its member municipalities to request its implementation. Further, at the conference of the Ontario Federation of Agriculture held this week in Toronto, the delegates supported the implementation of the section 86 program in the majority of rural agricultural municipalities.

Because of the success of open houses held last year and the very positive response from ratepayers who attended these sessions, my ministry is expanding its open house program. Starting in December, open houses will be held in every municipality throughout the province. Let me briefly explain the open house concept. Open houses are designed to support both the regular assessment process and the section 86 program. The open houses are held at convenient locations in each municipality and extend into the evenings, thus providing ratepayers with the opportunity to discuss their property assessments.

In advance of these open houses, each ratepayer will receive with his property assessment notice a special information insert announcing the dates, times and locations of the open houses to be held in each area. Open houses are designed to bring ratepayers and assessors together in an informal atmosphere to answer any questions about assessments, particularly in the case of new property assessments established under section 86. If a ratepayer can show the assessor that a correction should be made to the assessment, an amendment notice will be issued.

By taking advantage of this open house service, many ratepayers need not enter formal complaints. These open houses have helped to reduce substantially the number of complaints lodged with the assessment review courts. As well, we provide a useful forum for discussing assessment-related matters and increasing the property owner’s understanding of how his assessment is calculated.

As a further aid to ratepayers, my ministry, with the co-operation of the Ministry of the Attorney General, will shortly publish a pamphlet on appeal procedures. If a property owner feels it is necessary to register a formal complaint against his assessment, this pamphlet will clearly describe how to lodge an appeal correctly. The pamphlet will also assist the ratepayer in preparing supporting evidence for the complaint before the assessment review court.

I might add that when a section 86 reassessment is undertaken in a municipality, every assessed owner and tenant receives an assessment notice which, among other things, indicates the market value of the assessed property owned or occupied. Having the market value indicated on the notice in this manner affords ratepayers a better understanding of what their assessment is based on. Market value is an easily understood concept and provides them with the opportunity to compare their market value assessment with those of similar properties.

My ministry is mindful of its responsibility to municipalities and school boards to provide them with up-to-date information and data regarding actual assessments and the assessment process. In the past year we have undertaken a number of significant measures to improve both the level and quality of this information process.

First, we have recognized that the basic requirement for improving information services is a better understanding of municipal and school board needs, and particularly the importance of full consultation before changes are made. To this end, we have established an advisory committee on assessment data services headed by the assistant deputy minister and comprising nine representatives from five important municipal and school board associations. This committee has been operating for a year and has already agreed to a set of actions designed to meet a number of immediate requirements.

Let me cite some examples: This year, there will be a number of improvements in the assessment rolls; the 1978 roll format will be reinstated; grant codes will be reinstated; property descriptions will be expanded; a second roll and copy of the voters’ list will be provided upon request. For 1981, section 42s and 43s, which are supplementary assessments, will be issued up to four times a year, the last update not later than November 15. Municipalities will receive both a printed and taped copy of these updates.

The results of the committee’s efforts thus far have been endorsed by the Association of Municipalities of Ontario and all other major municipal and school board organizations. These corrective actions are under way and the committee will now turn its attention to planning the orderly development of information supply in the future.

We have also recognized the need for integrated planning, management and delivery of information through the development and improvement of our systems. To that end, a task force has been established to develop a system which is cost effective, responsive to change and both user- and client-oriented. In developing this system, two key objectives are to streamline our operations and improve the quality and delivery of assessment data to municipalities and ratepayers.

Mr. Chairman, this concludes my introductory remarks on the 1980-81 estimates for the Ministry of Revenue. I trust they have been of some assistance to members in explaining some of the main elements and features of the ministry’s operations as expressed by these financial accounts. I shall be pleased to provide them with further information in response to the questions I am sure they will be asking during the proceedings.

Mr. Haggerty: Mr. Chairman, in dealing with the Ministry of Revenue estimates this year in the time allocated, I think it should be shortened to some extent. We are at present dealing with the amendments to the Assessment Act and the Retail Sales Tax Act, both of which have had second reading, and we will continue with those areas of debate perhaps tomorrow.

There are other areas which I thought are perhaps of more concern to me and to the taxpayers in Ontario. We are well aware that the minister is the official tax collector for the province. But I think there is another person in front of him who calls the shot, and that is the Treasurer (Mr. F. S. Miller). It is a good thing the Minister of Revenue has rather broad shoulders to carry all that heavy load cast upon him every now and then, particularly as it relates to budget time and mini-budgets.

4 p.m.

The Treasurer has stated the policy as it relates to interest rates. He did so on June 17 of this year. In the discussion papers on the interest rate policy, he says, “An effective, national anti-inflation strategy could create the proper environment for a strengthened Canadian dollar.” He goes on to say mortgage interest tax credits are one area as are mortgage interest rate subsidies. Then he goes on to mention tax-exempt bonds. I think these are three rather important areas that would have some effect upon our present economy in Ontario.

On September 19, 1980, the Treasurer mentioned the joint ministers of finance conference that was held in Ottawa. It was a session for federal and provincial co-operation in fiscal and economic matters to promote economic recovery in Canada. He talked about fiscal disparities within Canada. Often I have heard the minister stand up in the House and talk about the gloom and doom that is preached from this side of the House on economic recovery in 1980. This is what the minister had to say in Ottawa:

“Statistics on our economic performance so far this year clearly indicate that we,” that is, the province, “are in a recession. Forecasts for our performance are not encouraging, with continuing decline expected for this year.” If anybody talks about gloom and doom, it is certainly the Treasurer of the province. He goes on to say, “Prospects are somewhat better for the next year, as the expected recovery in the United States will boost Canadian performance.”

For the last four or five years I have heard that same comment here in the House. We will look to the United States, and if there is a trend and upswing in their economy, it is going to filter back over on this side. Let’s not kid ourselves. That is not going to take place for another couple of years at the most, because when the automobile industry is in a decline over there it is also in a decline here and tax revenues are lost. If we look at the automobile industry in the United States, it is in severe difficulties as it relates to the number of cars that are coming in from Japan. The Japanese cars are more competitive than the American and the Canadian technology.

The Treasurer goes on to say: “It is the next few months that are critical, and action by government to stimulate consumer spending and reduce unemployment can help ameliorate the situation.” I think at that time, in September, we had some indication on this side, particularly in this party, that the government was moving in some area for tax rebates or a tax reduction in a certain sector of the economy, and the minister has brought that in.

He goes on to say: “Ottawa has certain tax tools at its disposal to boost consumer spending, but in my view -- ” this is the Treasurer -- “one of the most effective ways to stimulate consumer spending is via temporary retail sales tax cuts on specific items. In this regard, I would suggest that a federally assisted program of provincial sales tax reduction is an option which merits immediate consideration.”

The above statements by the provincial Treasurer have no substance to encourage the lagging economy here in Ontario. There is not a program of any substance to provide Ontario residents with a long-range industrial strategy or new job opportunities or to maintain Ontario’s existing industries and their viability. We, on this side, expected the Treasurer to introduce a mini-budget, providing once again ad hoc measures to uplift our sagging Ontario economy. To reduce sales tax on specific manufactured goods, small trucks, building materials and house furnishings in the hope of maintaining the present employment climate in these manufacturing sectors is a meagre step at this time. I guess we have no choice but to support these measures, meagre as they are. If the government is really concerned about Ontario’s decline in 1980 and perhaps into 1981, action should have been initiated much earlier in the new budget presented last April.

Hon. Mr. Maeck: We are really waiting for the federal boys to do something.

Mr. Haggerty: Do not wait for the federal boys. You have been in bed with them for a year now. You should have been on your toes and you probably could have got some help. I would not worry about the federal fellows. It is your job and you have a responsibility in this area.

Action should have been taken in the provincial budget introduced in April 1980. A program for economic stimulation would now be in effect and the results would be noticeable in maintaining existing employment and with a possibility of new employment opportunities. At this date, any benefit that may take place would not be a benefit to the Ontario employment opportunities during Ontario’s cold winter months that lie ahead.

One can be critical of this minister for allowing his government to follow a similar pattern of events and say in the last five-year period there has been too little, too late. Industrial plant closures are at a critical point that will require a joint effort by both federal and provincial governments. Any decline in manufacturing is critical to Ontario since it accounts for about 30 per cent of the provincial real output. Yet between 1970 and 1979, Ontario placed eighth in Canada in average annual percentage growth of manufacturing investment and eighth between 1970 and 1978 in the average annual percentage growth in estimated value of manufacturing shipments by provinces of origin.

Economists have clearly stated that Ontario is expected to lag behind the national average in manufacturing growth. Yet again this year we find ourselves in that same predicament. I am concerned about the possibility of the boycott by Alberta adding further difficulties to Ontario’s economy.

Because of this consistent under-average performance, real family income in constant 1971 dollars in Ontario sank from $13,518 in 1976 to a low of $12,916 in 1978. To put that in relative terms, data from the Department of National Revenue indicates the average income by tax information for 1977 for Ontario was $11,080, less than the average national income. Based upon these figures, this government and in particular the chief tax collector of the province should show deep concern about the direction this province must take on economic policy and not continue a tax policy that may well lead into a deeper recession, if we continue as we are now.

If one relates the above statements, they do indicate that Ontario families are overtaxed with more and more of the family income going into some form of provincial taxes such as retail sales tax, personal income tax, taxes on petrol, tobacco, liquor, entertainment, property tax -- and the list can go on. In fact, every time the Minister of Revenue and the Treasurer reduce the provincial sales tax on specific goods, it has shown an economic stimulation to some degree that offset the tax cuts in revenue.

I was interested in following some of the pages in the Province of Ontario Financial Report 1980 relating to budgetary review. It says: “Taxation: Ontario’s major tax revenue sources accounting for 50 per cent of the budgetary revenue are personal income tax, retail sales tax and corporations tax. Each of these taxes displayed a solid growth during the year as the economy experienced a stronger performance than had been expected. As a result, the growth rate of recorded personal income tax outdistanced both the previous year and the amount expected in the 1979 budget.”

4:10 p.m.

It states further here: “The federal government in an economic stimulation program gave a general reduction of three per cent for a period of six months. With a healthier economy in 1979-80 the yield from this tax rebounded to $2,414,000,000 and exceeded its budget by $119 million. It contributed 17 per cent of the province’s budgetary revenue.”

To continue quoting: “Ontario levies both an income and a capital tax on corporations. The tax is paid in monthly instalments with final estimated payments due three months after a corporation’s fiscal year end. Some growth in the tax was expected as rates were increased in certain areas in the budget. However, as the calendar year drew to a close and the corporate sector was generally reporting sizeable growth in profits, it became evident that the province would enjoy a substantial growth in its corporation taxes. The cash collections for the year were $1,616,000,000 which was a 26 per cent increase over the previous year and $281 million more than was forecast in the budget.”

Based upon those facts, the program of tax rebates surely indicates that the consumer is the key to Ontario’s prosperity, the hero in Ontario’s economic scenario. The Treasurer’s mini-budget, Supplementary Measures to Stimulate the Ontario Economy, was stated as a short-term measure.

Rebates of retail sales tax on the purchase of light trucks and vans will cost $38 million; retail sales tax for selected building materials, effective until June 30, 1981, will cost an estimated $94 million; exemption of retail sales tax for major household appliances will cost $25 million; exemption for retail sales tax for residential furniture will cost about $65 million.

One would think this tax exemption was a big deal for the consumers and that it was going to cost this government some $222 million for the items I have mentioned, while, in the first place, in the original budget of last April, the revenue forecasts are only estimated figures which could go up or down.

Actually, the government has little choice. They may well have to sacrifice selected retail sales tax. But in the long run, if employment remains stable and new jobs are created, this would create more tax dollars through personal income tax. What I am saying is, if we have higher employment we have higher personal income taxes. When a person is employed and has money in his pocket he will go out and buy additional taxable consumer goods and the revenues should increase. It is stated in the Provincial Financial Report 1980 that this is what happened when the overall sales tax was reduced across the board three per cent in 1978-79.

Actually, we lose nothing by reducing the sales tax on specific items for a period of six months. In the long run you would gain additional revenues. I suggest in this area we should be looking at the federal government’s participation in another program of a similar nature to reduce the sales tax across the board. Perhaps this government should be reducing that sales tax. Perhaps this government should remove the inequity that is there now when it deals with the specific sales tax on certain consumer goods.

If one goes out to buy a car or truck, it has not all been built and manufactured here in Ontario. For example, if one wants to avoid consuming too much energy or petrol, and one buys a General Motors half-ton truck with a six cylinder conservation type of engine with fewer cubic inches, I understand that motor is built in Mexico.

Late this summer I was in Windsor with the mayor of Windsor and a group of concerned people. One area they were talking about was plant closedowns. In the automobile industry, both Ford and Chrysler received substantial grants from this government to create new employment. They were moving machinery down to Mexico where there was cheap labour. Look at Ford’s world car. It is a small compact car. The reason they call it the world car is because it has parts from all over the world, but it is assembled here. Let me tell you, it is tough on a person who goes out and says, “Should I be buying a car this year?”

Another area the government should look at if it wants to spur the economy is interest rates. If a consumer buys a car today, he will pay about 16 per cent interest on the loan to finance that car. Not too many people are buying automobiles today for that reason. It is beyond their limit. If you want to control inflation you cannot shove all the responsibility on to the worker in Ontario. If the labourer is going to spend money, he has to be able to borrow it on reasonable terms. In this area the government has done nothing.

I was quoting from the Treasurer’s comments on what he should do about interest rates. He talked about subsidizing interest rates. It was done in one particular area, the agricultural sector. Again, is the government being fair to the citizens all across Ontario?

He talked about reducing the sales tax on home furnishings and building materials. Many a person today cannot afford to keep a home he bought two or three years ago because of the fluctuating interest rates. If one goes out to buy a home today, one will pay about 15 per cent or 16 per cent interest on a mortgage. When one looks at a $60,000 home, that person is going to have difficulty keeping that piece of property. It will take him about 25 years before he gets any equity in that property because, for the first 20 years, he will be paying it all out in interest.

Until this government, along with the federal government, comes in with some program that will control interest rates, I do not think our economy is going to come up. If we have to depend upon the American economy to bring us out of this recession, I do not think that is going to happen either. They have the same problem of high interest rates on the American side. People are not buying homes. If they do not buy homes they are not going to buy furniture. With almost every home purchased today, the appliances are usually included. They are built into the kitchen cupboard. If one has it painted a certain colour one will want the appliance the same colour. If one has an older appliance it does not blend in with that new home. I suggest for this government, or any government today, that is the problem right there.

4:20 p.m.

One thing I could go along with was the Treasurer’s suggestion of tax exemption on bonds. I do not know how many times I have stood up in this House and said that tax exemption on bonds was one area the government should be looking at.

The Treasurer was very critical in going to Ottawa. He said, “You fellows have to do your own homework. You have too much deficit spending.” One good thing about the federal government budget this time around was there was no increase in taxes. The Treasurer said that was one of his suggestions, but then again he hollered back the other way, crying that we have to have more revenue from the federal government. If taxes are not increased, we will not generate too much revenue.

I want to make a point about tax exemption of bonds. The same thing can apply here in Ontario because this government has overspent in the last 10 years, not particularly this government, but Ontario Hydro. Almost every plant Hydro has built has been financed by foreign money. I think its last issue was pretty well to the Canadian sector, which is good. If we have to go to the foreign market, and almost every government is issuing bonds in this area, particularly the United States market, we are paying 15 per cent to 17 per cent interest on the money now -- maybe not that high but at least 12 per cent or 13 per cent.

Hon. Mr. Maeck: It is more than that.

Mr. Haggerty: It is more than that. Well, it is climbing then; it is going higher than I thought it was. If we look at the exchange on the Canadian dollar, there is a good nest of capital leaving this country. I have suggested before that this is one area this government, and even the federal government, should be looking at. There are about $60 billion of personal savings in banks alone. I do not know about the trust companies or credit unions.

I think the Treasurer should expand on the idea of tax-exempt bonds. Give people here that have some wealth an opportunity to invest back into our economy in Ontario. Give them that tax break on bonds so that we do not have to go offshore to borrow money. In other words, we can stabilize our own banking and borrowing institutions. We do not have to go offshore. I bet it would be of benefit to the Canadian public.

If we look at the oil industry in Alberta -- and forget about the heritage fund in Alberta because they have not been doing too much with that -- much of the money for those pipelines has been financed by offshore money. In the long run we pay for that. I suggest here is an area that would reduce our borrowing on the foreign market. We would be able to call our own shots. We would be able to come in with an industrial strategy program. We could finance many of these things so that we would not have to depend upon giving handouts to large multinational corporations to induce them to stay in Canada in the hope they are going to maintain employment in this area.

I see nothing wrong with the government’s providing assistance to industry that may run into difficulties. Just look at the number of bankruptcies now in Ontario. They are away up. One of the reasons is that industry cannot finance its short-term borrowing; interest rates are killing them.

Actually, this government is not getting to the crux of the problem. If we can control the interest rates here, we can control our economy. We can put Canadian dollars back into our system that would be of assistance to the government and to the economy.

I believe if work went into this area, we could probably reduce the sales tax to five per cent. Consumer buying would be maintained and that is the key to the economy. As long as you put strings on the consumer and make purchasing difficult, then you are going to have a lagging economy. You may run into inflation but I do not think you will because much of the inflation in Canada is caused by borrowing money offshore. There are advantages to getting our own dollars working for Canadians and people in Ontario. I do not like to have to look to the States and say if their economy is improving, we are going to get a spinoff. Every time the bank interest goes up in the United States it goes up here.

I thought the new federal Bank Act would be of benefit to us, that foreign banks could come in, particularly the American banks, and we would have competition within the banking industry. But that is not the case and I suggest we are moving in the wrong direction.

Those are the points I thought the government should be looking at. I think we have to do something in this area that is going to be of benefit to all of the citizens and taxpayers of the province.

My last note here says this government lacks a long-term economic program for the province. It has been on an ad hoc basis for 10 years or so. Every time you get into a jam, you bring in a temporary measure and hope it is going to get you out of it. But that does not create the long-term job opportunities or the security that people want today. That security is not there. I suggest that a tax cut in personal income would provide a measure to expand the economy and provide Ontario with a more prosperous domestic economy. It would increase employment opportunities in the province. I would suggest an industrial strategy program for Ontario.

The minister talked in his opening remarks about the government policy on restraint. He talked about zero-base budgeting. I do not know if he is referring to the general government policy or just to his own ministry but this is an area that we should be looking at. I have often heard the Treasurer, who is your boss in a sense, say we are looking for a zero-base budget. You will never meet that goal. I do not see how you possibly can because if you head in that direction you will have more unemployment under the present circumstances.

The minister mentioned the senior citizens’ tax grants and I know the difficulties he is having. There are still a number of persons who have not received their grants this year and I have often wondered why he did not leave it the way it was under the tax credit system where the federal government did much of his homework for him with very little difficulty for the pensioners in the province.

I imagine the cost of advertising this is enormous and that it has caused headaches in the ministry. I do not know if he is ever going to get it ironed out. I do not know how he possibly can. I think he said there were 113,000 that still have not -- maybe it was 91,000 --

Hon. Mr. Maeck: It was away down.

Mr. Haggerty: it is down to 91,000 or something like that. I remember our critic, the member for London Centre (Mr. Peterson), speaking to the budget last spring, saying there would be 115,000 people getting less in property tax rebate than they received the previous year. Many people call my home and my constituency office telling me the same thing -- that they are not too happy with it. People on lower incomes have received less than they received a year ago. I do not know how you are going to overcome that but I think if you are going to move into an area like this it has to apply equity within that tax structure.

4:30 p.m.

You try to tell it to some people; it is rather difficult. I suggest, with those comments, Mr. Chairman, that I will go through the estimates vote by vote and continue on that. I do not think we will cover much of the Assessment Act or retail sales tax because we will be getting into that tomorrow night.

Ms. Bryden: Mr. Chairman, this is my first leadoff as Revenue critic. I have only had the portfolio for a few weeks, so I have not had an opportunity to get to know the minister or his officials very well. But I would like to say that to date the minister has been very co-operative in supplying me with any information I have requested and his officials have also been very courteous and co-operative. I hope these relations will continue. I think we both respect each other’s integrity and point of view, but of course we differ in some of our approaches as to how these problems we face in the ministry should be dealt with.

The Ministry of Revenue is really a very important ministry because everybody recognizes that taxes are very high and would like to see they are collected in the fairest and most equitable manner. I think it is part of the ministry’s responsibility to see that loopholes, as they occur, are closed as rapidly as possible, because there is nothing that destroys the equity of a tax system more than allowing people to slip through the loopholes.

This ministry differs from other ministries in two or three respects. For one thing, it has no annual report. I think back maybe 10 or 15 years ago they did produce an annual report for a couple of years, and it contained very useful statistics on the tax collection process, the cost of collection, some figures on where the money came from, such as succession duties, and what income groups were contributing how much. I think it might be useful to consider reinstating such an annual report. It is true the minister from time to time gives us the figures on the cost of collection, because he is rather proud of the fact that the cost of collection appears to be very low. Of course, when you are collecting billions and are in an inflationary situation, it may be easier to have what appears to be a low-cost collection.

Another way in which this ministry differs is that, according to the minister’s own statement, it does not have a policy-making function; tax policies are a function of the Treasury. However, administrative activities have a policy-making function, and I do not think the minister can really say he does not contribute to policy. His ministry tells the Treasury when a particular proposal is feasible and when it would be too costly to try to put in a particular idea and, in effect, he does have a policy-making function in that respect. However, if he had an annual report, we might also learn a little bit more about his philosophy as to whether the tax system should be for raising revenue or for achieving social and economic goals or for the redistribution of income, it would appear, if he says he has no policy-making function, that he considers taxes are simply for the raising of revenue.

Another way in which the ministry differs is that it maintains a very low profile. I must say I was glad they did not engage in the advertising campaign that seems to have afflicted the other ministries. It would have been rather ironic to have an ad coming out from the Ministry of Revenue that says:

“The Ontario tax structure is beautiful. Keep it green by paying promptly.”

Mr. Warner: I think we are going to see an ad tomorrow.

Ms. Bryden: I think that would have been a great misuse of public funds. I am glad the minister refrained from engaging in this orgy of ministry advertising that is going on.

I do find the background material supplied to the critics rather inadequate in that it is simply cold dollars and cents figures on expenditures with very miniature thumbnail sketches of what the dollars and cents are supposed to cover. I hope we will get more elaboration from the minister on some of the details.

If the minister published an annual report, he could also be of assistance to organizations like the Canadian Tax Foundation, for which I used to work at one time, in providing them with information on the incidence of taxes in Ontario. For example, what sections of the public pay the largest amount of retail sales tax? How much money comes from the building industry? The minister must have had those figures in order to provide the Treasurer with an estimate of how much he was going to lose when he took the sales tax off residential building materials for that short period between now and the next election. Other researchers at universities and in other kinds of social research would also find it useful to have more information from the ministry on the actual place where the taxes fall and how much revenue comes from each major category of taxpayer.

Another field in which I think the ministry has a role to play is in providing us with information on tax expenditures. I am sure the minister knows what tax expenditures are. There is a definition that was recently in a Canadian Tax Foundation booklet. It says that tax expenditures are: “those provisions in the income tax which result in lower income tax revenues owing to preferential treatment of certain economic activities, income or individuals. Tax revenues foregone because of the special provisions are in many ways similar to direct subsidies and may be viewed as expenditures made through the tax system or indirect expenditures.”

That is a definition of tax expenditures. There are others; some are more comprehensive and some are less. Basically, they are an expenditure of money which is not accounted for in the Legislature. We do not know in many cases how much it amounts to because it is simply deductions from income or from corporation income. We do not know who is getting the amounts. We do not know whether it is cost-efficient and we do not know really what impact it has on the economy.

The federal government has started to publish this sort of figure. The new system of spending envelopes, which the Conservatives in Ottawa inaugurated, does include tax expenditures in the spending envelopes. Without including tax expenditures in such a system of budget control, an end run could be completed around budgetary constraints by expenditures going through under the Income Tax Act. I think it is an area this province should be moving into.

I will say that the Treasurer in his mini-budget did indicate that tax expenditures were being studied in Ontario, but they are not being published at the moment. He did say, and I quote from his mini-budget: “I believe a more comprehensive analysis should now be undertaken and I have instructed staff to commence the review immediately.”

4:40 p.m.

He goes on to say: “I would like in so far as possible to concentrate our tax incentives more selectively in areas with the greatest promise and which offer the biggest potential economic gains. For example, I believe we should do more to encourage exports, import replacement, research and development and high technology industries such as aerospace, communications and microelectronics.”

I may say the provincial Treasurer stole all that from the New Democratic Party because we have been saying that for years.

We certainly think tax expenditures play a role in this kind of direction of the economy and development of an industrial strategy.

What I would like to ask the minister is, what role is his ministry taking in assisting the Treasury in this study of tax expenditures and in this attempt to use the results of the study to achieve these economic goals mentioned by the Treasurer? Obviously, the raw material is in the ministry’s files and computers. I would like to know how much he is involved in providing this study of tax expenditures and whether it will be possible, when some of the data is compiled for the Treasurer, to publish it for the general public. It would be extremely useful and would follow a pattern that is being adopted in many western countries now.

Another area where I think the ministry has an important role to play is in the development of administrative efficiency in our tax collection. If we do not collect taxes in the best possible way, we add to the tax burden. The minister mentioned his estimates were down by $1 million but, if one looks at the Gains figure, it is down by $3 million so that actually his estimates are up by $2 million. He did not mention the amount of the Gains decrease. He did mention it had decreased.

I really think the Gains is an expenditure that should be increased. It has been kept at far too low a level for many years anyway and it should be indexed the way the federal old age pension and guaranteed income supplement are indexed rather than waiting until the government decides to increase it.

With regard to administrative efficiency, I would like to know whether the minister has any figures on what the move to Oshawa is really going to cost. Has he any amount in this year’s estimates for that move and what does he forecast the final cost will be of that move? I understand the move to Oshawa was supposed to be part of the province’s decentralization system to spread jobs around the province. I very much question whether to move a whole ministry that is already operating is an economical move or whether it would be better to develop new activities in new areas, such as when one sets rip a dental plan or something like that. There will undoubtedly be great relocation costs, disruption of present activities and many employees will either have to be retrained or will have to look for new jobs if they are not able to move to Oshawa or do not wish to commute. I am not sure that is a very productive way of increasing jobs around the province.

The minister also mentions how much he has cut payroll costs, mainly through introducing computers and more electronic processing. I wonder how much of the actual reduction in employees is due to subcontracting of work. I understand the ministry does subcontract projects quite often when some operation is instituted. I would suspect that the subcontractor’s costs are not charged to wages and salaries but are probably charged to services. I would like to have that clarified for me. I would also like some information on how many subcontractors were used in the last fiscal year, for what purpose and at what price. I would like to know approximately how many man-years of work they provided for the ministry.

Some times these staff reduction figures can be a snare and a delusion in that the permanent staff goes down and the contract staff goes up. I think the ministries now count both those figures, mainly as a result of our protests over the years. They used to count permanent staff only. The subcontracting is another aspect that may be reducing the wages and salaries figure but may be increasing the services figure. We would like to know more about that.

We would also like to know what sort of benefits are received by people who are on subcontract. Does the ministry insist on anything being provided in the way of benefits to employees who come in through subcontracts beyond the statutory requirement of four per cent holiday pay? Do employees who come in under subcontracts get any other benefits? I would also like to know what the benefit situation is for contract employees. Do they get any benefits beyond the four per cent holiday pay?

With regard to the changes in retail sales tax which came in with the mini-budget, I will leave most of that discussion until we are discussing the amendment to the Retail Sales Tax Act. It does indicate that the Treasurer uses retail sales tax, if not for economic and social reasons, for political reasons since most of the rebates and exemptions self-destruct at the end of June when we expect the provincial election to be over. I find the proposed rebates and exemptions will undoubtedly benefit the rich more than the poor because the larger the expenditures the greater the tax relief. There is no ceiling on the value of whatever residential furniture or building materials one buys in order to get the sales tax exemption.

I would like to have seen the minister consider including in the sales tax exemptions that were given for this so-called stimulative program something that would have benefited those who have very little purchasing power for houses, appliances or furniture but are buying things like children’s shoes and clothing and who are still getting sales tax exemption on the shoes only if they are $30 or under. We all know that many shoes have gone up beyond that, especially for people who have any difficulty in getting a good fit.

I know the minister will say it is up to the Treasurer to decide whether additional exemptions should be given, but I would have thought he might have argued with the Treasurer that if he is going to benefit the rich, he should also benefit those who have very minimal purchasing power. That might also be stimulating in that those people will spend any money they save on additional items in the economy.

4:50 p.m.

I want to spend some time on the property tax grants for seniors, on which the minister also spent a considerable time. I think that program has given the ministry a high profile this year because the ministry has been entrusted with the administration of this program. It is not clear to me where the actual vote is for the grants themselves. I am not sure whether this comes under the Ministry of Treasury and Economics or the Ministry of Revenue. I cannot see in the estimates book any provision for those property tax grant expenditures.

I feel that the seniors’ tax grant has developed into an administrative nightmare. I agree that the seniors needed increased tax relief very badly. They were promised it in 1977 in the election campaign, but they did not get any change in their tax credits until three years later when this program finally came along; yet many of them are having difficulty maintaining their independence and staying in their own homes because of the rising burden of property taxes on them.

What I am quarrelling with is the government’s method of delivering the increased tax relief for seniors and turning it into what is a costly administrative nightmare. I know the minister says that things are improving, but he does himself admit that the telephones were overloaded and that many seniors did not fill out the forms correctly. In fact 40 per cent of the applications received have had to be referred to the special prepayment unit for further questions, processing and contacting of the applicants. That indicates that the program is an administrative nightmare.

I do not think it is entirely the minister’s fault. It is just that when a new system is started there are bound to be a lot of headaches. But I question whether we needed to start the new system.

The postage costs alone of the four extra mailings to seniors for the new seniors’ tax grants amount to about $500,000. Extra staff to process the applications, additional phone service, printing, advertising, cheque-writing costs, computer time and auditing will likely bring the total cost of distributing these grants to well over the million-dollar mark.

In fact, I hope we will obtain from the minister exact figures during these estimates as to what has been spent from the time the new grant system was adopted by the Legislature until the present. Those expenditures should be broken down, showing us the amount spent for additional staff, telephones, advertising, printing, mailing, additional supplies, travel, audit services, cheque-writing services, computer time and so on. Until we see that, we do not really know what the cost of this program is to the taxpayers of this province.

The former system of dispensing property sales and pensioner tax credits through the income tax system cost the government nothing for postage, handling or cheque-writing. It did publish a few leaflets to inform people of the fact that there were tax credits available through the income tax system. But it cost us nothing in the way of the kind of costs I have been mentioning for this new grant program. What is more, it enabled the government to direct the grants to those who needed them most without a means test, other than what is recorded in the privacy of the income tax return. We all make that kind of means report. If we do not normally submit an income tax return, we could easily submit one in order to qualify for the tax credit.

This fall the government exchanged that efficient system of tax relief for a costly new delivery mechanism which will provide grants to many who do not need them and take them away from many needy seniors who formerly got them. It was all done for political reasons. The provincial government wanted to be the issuer of the cheques instead of having them come from the federal income tax office. So it set up a whole new distribution system in the Ministry of Revenue, regardless of the cost and the inefficient way of delivery. That is the kind of government we have been getting from the Progressive Conservative Party for too long.

The government tried to offset this waste by cutting off many seniors who had benefited under the former tax credit program. They included residents of nursing homes, homes for the aged and seniors living with relatives. Close to 100,000 seniors who get no compensating increase through the guaranteed annual income system increase will receive less money than they got under the former tax credit program. That is an indication of this government’s concern for senior citizens who have contributed a great deal to our province over the years.

It is not enough to say that many of them got a $35-a-month increase from the federal government this spring. If we take away some of what they gained from the federal grant, they do not go ahead. It does not seem fair that we should reduce their gain from the federal government when it was given to them on the understanding they needed this amount very badly. Besides, only half or so of seniors get the new federal increase because it only goes to those who receive both the old age security and the guaranteed income supplement.

Residents of private nursing homes who pay some part of their accommodation charges out of their own pockets are being particularly discriminated against. They should be entitled to the same tax relief on these rental payments as other seniors who pay rent in the private sector in order to offset the property taxes that are built into the rent charged. The government takes the attitude that because residents of nursing homes and of homes for the aged are in institutions which receive some form of government subsidy they are not entitled to the same tax relief as other people. But I submit these payments to nursing homes for a share of the seniors’ accommodation are a part of our health care system and they should not disentitle the seniors from receiving tax relief on the amounts they pay out of their own pocket for the other portion of the accommodation.

The government also planned to save money by cutting out all newcomers who had not yet qualified for the old age pension. But, fortunately, it was persuaded, mainly by the New Democratic Party pressure, to change this part of the original bill. However, it seems to me inhuman and cruel to take away a benefit from seniors who had been receiving it for a considerable number of years. I refer to those who are in nursing homes, homes for the aged and chronic care homes and who are living with relatives.

5 p.m.

If one is going to say that some of those benefits should be restructured, I do not think it should apply to those who have been receiving them for years and counting on them, especially when we know that at least two thirds of seniors live below the poverty line. I think if one is going to bring in changes in the benefit system for reasons of overall improvement, then one makes it apply only to the new applicants, while those who have been getting the benefits continue to get at least as much as they would have if the old system had stayed in. That is the humane thing to do, not this cutting off in order to save some money to finance a scheme which benefits the well-off too much.

I would like also to refer to the fact that the first tax grant leaflet for seniors which went out, the blue one, did not mention anywhere that any persons in institutions were not eligible for the grant. Under eligibility it simply said, “If you are an Ontario resident 65 years of age or older, you are eligible, regardless of income, for the property tax grant if you pay property tax on your residence or rent for your accommodation.” It does not qualify the kind of accommodation in any way. It was not until much later this fall that the ministry got out a new version of its pamphlet, to which I refer as the green one, which did mention the ineligibility of people in institutions. I submit that when the ministry made that kind of mistake, it should have backtracked and granted the tax grants to the people in institutions because their hopes had been built up. They had thought they were sharing in this new assistance to senior citizens.

Here are some of the other administrative problems under this new program. First, letters, leaflets and advertisements did not make it clear who was eligible, as I have just mentioned. Because of the confusion, some ineligible seniors applied and received grants which they are now being asked to repay. Of course, the minister sent them the application grants; so in effect he contributed to the confusion.

I would like to know how many are caught in this situation and how many who have been sent cheques for which they were ineligible are being asked to repay.

Hon. Mr. Maeck: I think the member should keep those questions until we get to that vote because that is when I am going to answer them all.

Ms. Bryden: Yes. I am just giving the minister a warning that when that vote comes, I would like that information.

Secondly, others suffered the disappointment of finding that they did not qualify for what had been announced as the fulfilment of the government’s 1977 election promise to give seniors more tax relief and assistance. Thirdly, applications were not processed in the order received. As a consequence, many seniors became worried that they did not qualify when they heard their neighbours were receiving cheques, but they could not get through on the phones to find out. Some in Toronto trekked down to Queen’s Park to get help, only to find they had to go to 77 Bloor Street West. This was not shown on the information sent out, although subsequently the minister did try to correct that with an advertisement in the newspaper.

Fourthly, no working copy of the application form was supplied. Even the income tax people supply working copies. If mistakes were made, a duplicate could be obtained only after an affidavit was filed.

Fifthly, inadequate staff, inadequate phones and slow processing made it difficult to get questions answered or to find out if applications had been received. Sixthly, while the minister reports that 820,000 initial letters were sent out and 727,000 application forms were sent, he says he is processing only approximately 520,000 applications. What happened to the other 200,000?

Hon. Mr. Maeck: I told you some of them were married and you didn’t listen to me.

Ms. Bryden: Presumably, you sent the application forms out only one to a couple. Since the deadline is December 31, 1980, less than a month away now, he should be following up on the “no responses,” both to his initial letter and to the mailing of the forms. Thousands may miss out on this tax relief because they do not understand the form or are not sure if they are eligible. Obviously, this is another administrative cost we should incur. It will be costly to follow up on all the “no responses,” but we should incur it because we have adopted this inefficient system.

I feel it would have been much better to improve the income tax credit system -- there were things that could be improved in it -- rather than subject seniors to the many hassles they have endured under this new program. It would have been a whole lot cheaper. The minister has admitted he is already planning improvements for next year in his scheme and, in doing so, he admits there is a great deal of room for improvement.

With regard to the seniors who are not receiving old age security at the present time, but who are now eligible for this tax grant, I would like to know what advertising is being done to alert them of their eligibility since they are not on the computerized mailing list the minister has access to. He does mention ads in the ethnic newspapers, but I would like to know if he has gone beyond that to ads on ethnic radio stations, on channel 47, the multilingual TV, and letters to ethnic organizations acquainting them of the eligibility of people who are newcomers to the country, but who are citizens and landed immigrants and are entitled to this tax relief. I think that is all I will say at the moment about the pensioners’ tax credit program but, undoubtedly, we will have some more discussion on it when we come to that item in the vote.

With regard to assessments, the minister says progress is being made. I find it hard to consider section 86 very much progress. Even the minister admits section 86 is a temporary measure, pending a final solution to the question of how to improve the assessment procedure to achieve equity and fairness. Obviously, as we mentioned in the debate last week on Bill 185, the government doesn’t yet have an answer after seven years of postponement of market value assessment.

It doesn’t yet have an answer to how to avoid the shift in the tax burden which will result from the use of unadjusted or unrefined market value assessment because of differences in markets or some properties for which there is really no market. I don’t know what market there is for the Toronto-Dominion Centre and of course, the ministry has worked out other methods than market value for assessing the Toronto-Dominion Centre. I think we have got to work out other methods for measuring the value of properties where speculation has occurred and where there are other factors affecting values besides the actual use to which the property is being put.

5:10 p.m.

I would have liked to have seen some measure for an improved tax credit in the mini-budget the Treasurer brought down. It seemed to me that might be a way of getting some more purchasing power into the hands of the economy. The tax credit has not been changed since 1975. As a result, its value in mitigating the regressivity of the property tax has been greatly eroded due to inflation. Many people who used to qualify for a substantial credit get very little or nothing now under the present tax credit.

While I think the minister’s idea of assessment open houses is a very good idea to bring to the public an understanding of what assessment is all about and to demystify the process, I am sure the people who come in would be very happy to also come in and study how a new tax credit would work to their benefit. Not too many of them are able to benefit from section 86, although within the various categories there are some increases in equity as a result of section 86.

The thing I don’t like about section 86 is that once you do get some of the inequities ironed out, you still have not determined how much of the total burden should be borne by each category. Of course we have to recognize that as long as we don’t have property tax reform and a new assessment system, we are going to have a continuation of the heavy concentration on appeals, particularly by those who can afford lawyers and who can benefit greatly from a successful appeal. That means that our assessment system rules are really made by the courts, and they work entirely on a straight comparison basis rather than any sort of a philosophy as to how one should assess the use and the value of a given property.

When we were discussing Bill 185, I mentioned that the government had spent hundreds of millions of dollars on the assessment process. The minister disputed this figure, but I was referring to the total expenditures since the provincial government took over assessment in 1970. It has gone through all sorts of exercises in producing market value assessment figures. The total cost in those 10 years from 1970 to 1979-80 has amounted to $403 million, so I would say that is hundreds of millions.

Hon. Mr. Maeck: In studies?

Ms. Bryden: No. The total cost of the assessment branch, and there is another $59 million in for this year, I believe. I think when we get to the assessment vote we will discuss in more detail some of the problems in that area. That is all I have to comment on at the moment.

Hon. Mr. Maeck: Mr. Chairman, I am not going to make a detailed reply at this time because most of the speeches made were a series of questions that should properly be put when we get to the votes, when I have the staff here for those particular votes, rather than going into them at the moment.

There were some general statements made by the member for Erie (Mr. Haggerty). He was dealing a great deal with interest rates and so on. I suggest to the member that interest rates in the main are a problem of the federal government rather than the provincial government. I would suggest his friends in Ottawa should be doing something about the interest rates rather than depending on the province to do all these things.

Interjection.

Hon. Mr. Maeck: Sure we did. It is not a bottomless barrel where we can just continue to spend money.

Mr. Haggerty: They were happy to get it.

Hon. Mr. Maeck: Sure they were, at a cost of some $25 million. However, if we extended that to every area of the economy, you can imagine what would happen. It would break the Treasury. I would just point out to you that as far as we are concerned, while interest rates are a concern, the Treasurer has been dealing with the federal government and suggesting to them that they do something about interest rates. He has been critical of them, but they have done nothing, as they did nothing in the budget, which put us in a position where we had to bring in a mini- budget. You also condemn the mini-budget that we had to bring in because your federal counterparts did absolutely nothing about the economy in this country.

Mr. Haggerty: They did exactly what you wanted. They made no tax increases.

Hon. Mr. Maeck: They did absolutely nothing. The member for Beaches-Woodbine (Ms. Bryden) did bring up one subject that perhaps I should discuss at the moment, that is, the matter of the annual report from the ministry. She is quite right. I think the last report was in 1972. It was discontinued simply because there was no demand for it. Nobody was looking at it and nobody asked for it, so the minister at that point in time -- which was before I was in the ministry -- discontinued the annual report and has taken a different approach.

Mr. Laughren: You were afraid it would be referred to committee.

Hon. Mr. Maeck: Are you in this debate?

Mr. Warner: He is now.

Hon. Mr. Maeck: Welcome to it. I am glad to see you here. I miss you when you are not there.

We have adopted the policy of providing information on request rather than doing it the way the member suggested. I would suggest to her that we will supply any of the detailed information she wants. There is no hesitation about it whatsoever. All she has to do is tell us what she wants and if it is available within the ministry, we will get it, provided it is not confidential tax files or something like that.

The decision was taken some time ago to discontinue the annual report simply because no one seemed to be interested in it.

Most of the other points made by the member for Beaches-Woodbine are, I believe, questions that will come up as we go through item by item in the votes. I think perhaps, Mr. Chairman, it would be wise now to move into the votes.

On vote 801, ministry administration program; item 1, main office:

Ms. Bryden: Mr. Chairman, with regard to what the minister just said about making information available if we want it, I wonder if some organization, like the Canadian Tax Foundation or a professor at the university, asked for detailed information on the incidence of the retail sales tax, would his ministry provide that kind of information to organizations of that sort?

This is why I think you do need an annual report. I am sure our research department in the NDP made great use of that report and I imagine tax researchers generally across the country made great use of that annual report. Also, as taxes become more and more important and are more and more analysed as to their social and economic impact, it seems to me we do need that kind of information. At the moment, I do not know why the Treasurer chose the particular items he did for the sales tax rebates, except that he says these are the ones that are largely produced in Ontario or where there will be little tax leakage, but we do not know what percentage of the retail sales tax comes from each of these items.

5:20 p.m.

Hon. Mr. Maeck: Mr. Chairman, the usual procedure is for us to provide some information to the Treasurer to help him make the decisions he would eventually make as to which items he would remove the sales tax from. We have compiled within our ministry information such as the amount of sales in each different category, but I understand the Treasurer also has much of that information within his own ministry. The Canadian content would not certainly come from our ministry, it would come from Treasury. We wouldn’t have any record at all in our ministry of that type as to whether or not they are Canadian content. That type of information would not be provided by us to the Treasurer.

I do understand that when he made his budget statement he chose the ones he did because of the Canadian content -- the number of articles within that group that would be manufactured primarily in Ontario because we are removing the Ontario sales tax. It was not restricted to Ontario, but certainly they would receive the benefit of the doubt if there were two different items the Treasurer was looking at and one had a 60 per cent Canadian content and the other one had 20 per cent. Obviously, he would have gone to the 60 per cent and preferably Ontario content because it is Ontario tax dollars we are granting the exemption from. So it is coming out of the Ontario budget as we obviously want to stimulate the economy in Ontario.

Ms. Bryden: You did tell him how much sales tax revenue came from the various items on which he applied exemptions or rebates. I think that sort of information should be published annually -- how much revenue comes from building materials and how much comes from automotive equipment and the various large sectors of the economy. I think we should know how much each is contributing to the sales tax total.

Hon. Mr. Maeck: As I indicated, that information is available to anyone who requests it. That is not confidential information. I see no need for publishing an annual report that will sit on the shelves somewhere and which nobody looks at. But if people are asking for information, if it isn’t confidential information, like tax files and so on, we are prepared to give it. It is there.

Mr. B. Newman: Mr. Chairman, I wanted to ask the minister if he is familiar with the problems the senior citizen tax grant has caused not only to senior citizens but to each and every one of us operating a constituency office. Would we discuss that under the main office or would that be under tax revenues in one of the succeeding votes?

Hon. Mr. Maeck: It is under the guaranteed income and tax credit vote, which is considerably down the line. It is under vote 803.

Mr. Warner: I wish to deal with the same subject, but I wish to deal with it partly under the main office. The main office vote speaks to the leadership of the minister. I would like to know whether the minister is accepting the responsibility for the blundering of this program or whether he is shuffling that responsibility off to someone else down the line. The program has been dealt with in a rather unfortunate way and is a disaster. I would like to know whether or not he intends to accept responsibility for the unfortunate disaster and what plans he has to make sure that those people who qualify and have not yet received their cheque will get the money.

What plans has he to ensure this type of bungling will not occur in the future?

Hon. Mr. Maeck: That is the type of smart alecky question I always expect from you.

Mr. Warner: Explain that to my senior citizens.

Hon. Mr. Maeck: I am telling you that is exactly what you are, a smart alec. That is the type of question I would expect from you.

Mr. Warner: On a point of order.

Hon. Mr. Maeck: There is no point of order.

Mr. Warner: There certainly is. On a point of privilege, Mr. Chairman.

Mr. Chairman: What is your point of privilege?

Mr. Warner: If the chair is going to rule on that language, as to whether it is parliamentary, I suggest it does so. I would also ask the minister to repeat those comments to those seniors in my riding who dutifully filled out their forms in August and September and have yet to receive their money. You call me a smart alec for standing up and defending them. They want their money as promised by this government. I take it from your remarks that either you do not believe they have a legitimate complaint or that you do not intend to fulfil your responsibility. Maybe the whole thing is a phoney program.

Mr. Chairman: Does the minister have any comment?

Hon. Mr. Maeck: Mr. Chairman, I am certainly prepared to answer a question presented in the proper manner. The member knows very well that my remarks referred to the tone of the question rather than to the senior citizens in the province.

If he had been here when I made my statement, I covered all that. He was not here. Perhaps he did listen to it -- I do not know -- but he knows very well we worked very hard to accommodate all these situations, including the request that came from his office. Maybe he could give me a little bit of credit for the way we tried to handle the situation when we were dealing with 820,000 senior citizens in this province.

He knows very well that a new program is not that easily instituted. We have done everything we can, and it was not a bungling job at all. We have done exactly what we could do and more. Our people worked on weekends. They worked this past Saturday trying to resolve these situations. I think it is unfair for the member to stand up and take the tone he has taken to this minister and this ministry after all the work we have done and the co-operation he has received from us.

Mr. Chairman: I listened very carefully and I think the question really relates to the administration under item 1 of vote 803. I suggest the member pursue that under vote 803.

Mr. Warner: If the chair would prefer that, I would be more than pleased to do it.

Mr. Chairman: I think it best to discuss the estimates in an orderly fashion.

Mr. Laughren: Mr. Chairman, I rise at the risk of offending the very sensitive minister. It is with some trepidation I do so for fear I will be cut off at the knees. I have often wondered why the policy of the ministry prevents us from obtaining the information to which my colleague the member for Beaches-Woodbine (Ms. Bryden) was referring. I would like to be more specific on the whole question of revenues and profits.

I was at the Ontario Mining Association dinner a week or so ago, at which I won a football pool and got the $9 in the mail today. That is another story. At that dinner I was talking to some of the mining executives who asked me what my problems were with the mining industry. Two hours later, when we finally got around to some of the more minor points, I told them one was the inability to get information.

I have always wondered how much we get in tax revenues from the mining sector of the province. I have often wondered how much tax the mining sector pays to Ontario. The figures we have, which the government will not refute, are that in Ontario we get less than two per cent -- about 1.1 per cent -- of the total value of production returned to the people of Ontario in the form of revenues from our nonrenewable resources in the mineral sector.

I look at Saskatchewan’s value of production -- and I am talking about minerals now, not oil and gas -- and the return to the people of Saskatchewan is in excess of 20 per cent -- 22 per cent. I ask myself how it is that in Ontario, which is a resource-rich province, we receive about 1.1 per cent when Saskatchewan receives 22 per cent as a return to its people on a nonrenewable resource. After all, the term “nonrenewable” says it all. When it is gone, it is gone and we should be getting the absolute maximum potential for that resource.

5:30 p.m.

This government simply will not tell us. It has always said that information is privy. I have asked the mining people if they have any objections. They have no objections as long as you don’t single out what Falconbridge, Noranda and Inco individually pay. It would all be in their published statements on profits anyway. I wonder why the minister would tell us that.

Hon. Mr. Maeck: I wonder if the member is referring to the mining tax or the corporation tax.

Mr. Laughren: Mining.

Hon. Mr. Maeck: I can’t very well give him any information on that because, as he knows, that comes under the Ministry of Natural Resources. I don’t handle the mining taxes for Ontario. They do not come under the ministry.

I was checking with staff while the member was speaking to see whether there is any way we could break down the amount of corporation tax paid by the people in, say, the mining industry as opposed to some other corporations. They tell me it is rather difficult because some corporations are into mining and other fields and they are all mixed together. It is difficult for us to split them up.

I don’t know why the total figures for the mining tax would not be available, but it isn’t really an area that we administer.

Mr. Laughren: To pursue that briefly, how in the world does the minister and the government know whether we are getting an adequate return from nonrenewable resources?

Hon. Mr. Maeck: I would presume the Ministry of Natural Resources would be handling that part of it.

Mr. Laughren: The Minister of Natural Resources gave us the same answer you did.

Hon. Mr. Maeck: They do collect the mining tax, do they not?

Mr. Laughren: The Ministry of Natural Resources collects the mining taxes --

Hon. Mr. Maeck: Yes.

Mr. Laughren: -- which it should not do by the way. It is a conflict of interest. The Ministry of Revenue should collect the mining taxes. I do everything in my power to increase the size of the minister’s empire. He should be collecting the taxes for the mining industry because then he would have a handle on it.

We are continually getting this shell game. When one talks to the Minister of Natural Resources, he says: “Well, you can’t separate corporation taxes from mining taxes. Go see the Minister of Revenue.” When you talk to the Minister of Revenue, he says:

“Well, I don’t know. I don’t have control over the collection of taxes from minerals. Go see the Minister of Natural Resources.” You play one against the other. The end result is that you don’t tell the people of Ontario what we are getting from our resources -- not theirs, ours. Why are you doing that to us?

Hon. Ms. Maeck: I think that was the reason why all of us in the tax field eventually report to the Treasurer. We have talked about this before. He is the one who makes the final fiscal policies, first taking into consideration all the taxes. In the Ministry of Consumer and Commercial Relations, the Liquor Control Board of Ontario collects the liquor tax and reports to the minister. Then the money gets back to the Treasury. That is the reason the Treasurer has to accept all the fiscal responsibilities. That is the way the system works.

Mr. Laughren: The minister knows how much money he gets from liquor sales and profits in Ontario, doesn’t he?

Hon. Mr. Maeck: That’s right.

Mr. Laughren: Surely resources are as important to Ontario as liquor, yet the minister does not know that. Nobody knows it. None of you knows how much we get from our resources. It is not just the Minister of Revenue. The Minister of Natural Resources does not know. Now you have introduced a third person into the act, the Treasurer, and you are right in that he does not know either. The Minister of Northern Affairs -- well, we can talk about him some other day. None of you knows how much is coming back to the Treasury from resources.

If you didn’t know how much was coming back to the Treasury from the sale of popcorn or peanuts, I would say, “Okay, it is not the end of the world,” but here we are dealing with a nonrenewable resource and you haven’t got a clue.

Hon. Mr. Maeck: I know but --

Mr. Laughren: No, you don’t know. I will put it to you directly: Will you tell us before these estimates conclude how much the people of Ontario get as a percentage of the value of production in the form of revenues to the consolidated revenue fund?

Hon. Mr. Maeck: The member is referring again to mining. This is how the original question started. I cannot give that commitment. You must talk to the Minister of Natural Resources or the Treasurer. It is not in my jurisdiction whatsoever.

Mr. Laughren: They sent me to you.

Hon. Mr. Maeck: No, they have not sent you to me because it is not in my jurisdiction and never has been.

Mr. Haggerty: Mr. Chairman, I want to ask the minister if he has any new policy on racetrack tax. I am sure he is aware of the difficulties that the Fort Erie track is now encountering where there is a good possibility it may close its doors. The tax revenues generated through horse racing are estimated at $55 million. I brought to the attention of the minister last year the fact that I thought we would have some commitment from the government or cabinet that some of that tax should be donated back to the Ontario Jockey Club and the standardbred racing association in Ontario to increase their purses.

The horsemen are having difficulties in entering horses in certain races because they say there is not enough money for winning. They feel the cost involved in raising a thoroughbred or standardbred horse does not warrant their entry at some tracks in Ontario because the winnings are not that great. Has the minister or the cabinet given any consideration to giving back a portion of the racing tax to the industry so it can maintain a viable industry in Ontario? If the racetrack at Fort Erie was to close down, there will be a possible loss of 400 jobs and business assessment and property assessment of about $400,000 a year in revenues that would be generated for the municipality.

It is one of the best equipped and nicest racetracks in North America. It certainly does add to the tourist industry in that area, but they are having difficulty in maintaining it because they say it is not profitable. Has your ministry, along with Treasury and the Ministry of Consumer and Commercial Relations, discussed the matter of providing assistance in some form of a grant to the horse racing association in Ontario?

Hon. Mr. Maeck: No, I have not discussed it with the Minister of Consumer and Commercial Relations (Mr. Drea) under whose jurisdiction it falls. I would suggest to you that under the Race Track Tax Act the seven per cent that is charged is charged against the winning tickets. If you are a winner, you are the guy I am going to take the money from. I am not taking it from the municipality, nor from the people who are running the racetrack, but from the winners. We collect seven per cent of each winning ticket. It would be rather difficult to justify taking that money, transferring it around and giving it to whoever might be having some financial problems. Racetracks come under the Ministry of Consumer and Commercial Relations.

Mr. Laughren: Here we go again.

Hon. Mr. Maeck: You do not expect me to take authority or the jurisdiction for everything. It is a question you would have to discuss with him. As far as the tax itself is concerned, as I indicated, it is a tax on the winner. If a person wins $100, we are going to take $7 away from him before he ever gets his money. It is not a matter of taxing the people who operate the racetrack or the municipality, or whomever.

5:40 p.m.

Mr. Haggerty: I quite agree with that but what I am saying is the government generates $55 million on winnings it takes from a racetrack. I am saying if the government does not put some new life into the racing industry in the province, then someplace along the line, it is not going to generate $55 million in tax revenues for the minister’s department. You may end up with $30 million next year. You will lose $20 million. All I am suggesting is you put some new life into the horse racing industry in Ontario. Take some of that tax that you are generating from winners and put it back into the winning purses for the horses running at the track. That is what you should be doing.

It is not actually a handout to the industry; you are just giving some of it back to generate further tax money for Ontario. I am looking at Fort Erie. You lost the other track in St. Catharines; the Garden City Raceway there closed its door. You are looking at standardbred horse racing at Flamboro Downs and Mohawk. I don’t know if they are back running at Windsor.

An hon. member: Oh, yes.

Mr. Haggerty: They may run into difficulties in Windsor too, where a few years ago the track closed the door for the same reason, that the government did not put some of that money back in to keep the industry going. I know the Ontario Jockey Club is not having that great a season at times in the Fort Erie area and other smaller tracks. I suggest, before that track disappears, the government should be moving in that area to assist the horse owners in Ontario by giving them higher purses so that they will keep running their horses at these tracks.

I know the federal government has come in with a program -- intertrack wagering I guess it is -- where one can call from the Fort Erie track to Toronto if the horses are running at Woodbine. Of course, one must have a credit card there before they will take that phone call. In other words, one is going to have to have a little bank account with the Ontario Jockey Club in order to draw from that account. I do not know how successful this will be. But apparently the standard-bred association and the thoroughbred association in Ontario have agreed in principle that this will provide additional assistance to them. Again, I suppose that means more revenue to your ministry and to the government. I suggest the ministry give a little bit back to keep the industry going. If not, that track will disappear too.

Hon. Mr. Maeck: Mr. Chairman, the total tax revenue is $45 million a year not $55 million.

Mr. Haggerty: It is estimated at $55 million. That’s probably what you got last year.

Hon. Mr. Maeck: All right. I am told that some breeders already get grants from the government and there are grants to track operators.

Mr. Haggerty: That is for E. P. Taylor.

Hon. Mr. Maeck: There are grants to track operators totalling about $6 million. So a fair percentage of the tax dollars we have collected is going back. You should understand what happens. The $45 million we collect goes to the general revenue fund and then that money is used by other ministries in whose jurisdiction these things fall. I cannot say directly that we are going to give back the tax dollars we collect. That is not the way the system works. We collect the money, it goes into the general revenue fund and then the minister who is responsible for race tracks decides in conjunction with these people who are running the tracks, I suppose, how much assistance is going to be generated. At the moment, it is $6 million a year.

Mr. Haggerty: I am well aware of that $6 million. I do not know if it is that high or not, but I remember back in 1970 more money was given to the horse racing associations in Ontario than was given to the housing program, if I can recall that debate.

The government is providing some assistance now, but the people who get the most benefit from it are the top horse breeders in Ontario. E. P. Taylor with his line of horse racing is one of the top recipients and maybe the Connie Smythe stable. I am talking about the average horse owner in Ontario who puts his horse to race at the track where people can bet on it. He is the one who should have some assistance. The purses should be higher to encourage those people to bring their horses to race at the track. If we are going to run races with purses that were established 10 or 15 years ago, with the cost of inflation and that, it hurts this industry.

When we look at the impact and hardship it will cause to the Fort Erie community if that track closes -- and if that one closes we will see others close too -- all I am suggesting is some assistance should be given. I know the Minister of Consumer and Commercial Relations (Mr. Drea) is a strong supporter of off-track betting, like many of us, but there has to be some provisions too so that horse racing will continue at these other tracks. In other words, you could have a pipeline for intertrack betting from one racetrack to the other. You could have all the horses running in Toronto and still have the betting done at a small room about 10 by 12 feet.

I suggest you take a good look at this thing because it is going to cause you some difficulties. I understand the minister may be in Fort Erie or Niagara peninsula now. I don’t know what kind of a package he is going to have for them, but I hope it is something good to keep the industry going. As I said last year, it is better to have half a loaf than nothing at all.

Mr. Laughren: Mr. Chairman, I wonder if we could switch from the needs of the horses and horse breeders to the needs of working people in the province.

For some time now there has been a problem with the head office policy of the Ministry of Revenue regarding the assessment of mining installations. The regional municipality of Sudbury, the NDP in the Sudbury area, and I believe, even Inco, if not Falconbridge as well, have all agreed that what is required is a different kind of assessment on the mining installations in the Sudbury area and in other mining communities as well.

There are several options open to the minister. One is to change the taxation system so that more of the revenues are funnelled back to the municipalities. That would be done through the taxation process. The other one more directly appropriate to this minister is the way in which those installations are assessed. There is a system called the foundation tax which would tax the industry differently. There is also a way in which the underground equipment can be taxed. Right now, it is not taxed and the minister, I suspect, knows that a great deal of the machinery equipment is underground in these mining installations. What is above ground is merely a shell covering up some equipment.

There is an enormous opportunity to increase the assessment revenue from the mining industry. I believe one figure that has been thrown about in the Sudbury area is about $6 million a year which could flow back to the regional municipality of Sudbury. I would use the same argument for Timmins and all those other mining areas as well. Year after year succeeding Ministers of Revenue nod their heads sagely which the minister just did -- well, he nodded anyway -- in general agreement that something maybe should be done about tax revenues for mining communities, but nothing innovative is ever done.

You won’t use the foundation tax process. You won’t use the taxation of underground machinery. You carry blithely on in the old way. The mining companies would have no objection because they would prefer to be seen in a better light in the communities in which they are located. It is to their interest; it is good public relations on their part. The municipalities, of course, would be in agreement, but this government simply won’t move. I don’t know whether they feel the mining companies can’t absorb it -- that is total nonsense -- but year after year they refuse to do anything about it. I am asking the minister directly if he will do something about the assessment of the mining installations in those various communities across the province.

Hon. Mr. Maeck: Mr. Chairman, I recall the first set of estimates I had in here when the member for Nickel Belt brought up the same subject. When he finished talking he said: “You and I will sit down some day and discuss this.” I am still waiting to sit down and discuss this with you.

Mr. Laughren: Yes. That’s how slowly you move.

Hon. Mr. Maeck: It is obvious you and I are a long way apart.

Mr. Laughren: Every time I go to South River you are never there.

Hon. Mr. Maeck: You wanted to sit down and discuss it. You had some sort of a proposal you had written on which you wanted to bring me up to date, but you have never come back to me on this thing until today.

However, my assessment staff have met with municipal officials in northern Ontario and groups of mining companies as well. They have their representatives and so on. They have worked out a system that seems to be agreeable to both parties. There were some problems, for example, mines that were shut down for a period of time and then brought back into production again as the price of ore changed. It is my understanding they have worked out a reasonably acceptable solution for both the municipality and the mines. If you would like to ask further questions on it when we are into the assessment part of the estimates and I have my staff here, I will be happy to answer. My last understanding was the assistant deputy minister and some of the senior staff did meet with representatives not only from Inco, but from Falconbridge and a lot of the mines in the Sudbury area particularly, along with representatives from the municipalities in the Sudbury basin. It is my understanding it is reasonably well accepted by both. I will check it out; I could be wrong.

5:50 p.m.

Mr. Laughren: Is it a correct assumption that will mean increased assessment revenues for those mining municipalities? They would not have agreed otherwise.

Hon. Mr. Maeck: I would not make that assumption until I have had a chance to check with my staff to see exactly what did happen in the meeting.

Mr. Laughren: I might add for the minister’s information I was talking about the kind of presentation I made on behalf of my party to the Blair Commission on the Reform of Property Taxation in Ontario. You do recall the Blair commission whose recommendations you embraced so completely.

Mr. B. Newman: I want to ask the minister about the collecting of revenue at the racetracks. The racetracks in cities bordering on the US allow bets in both American and Canadian money. Naturally, the premium on American money is fairly great and, regardless of what people say, the racetracks are not operating to be anything other than profit-making organizations. I just wonder how your ministry is able to have verified controls as to the amount of American money that is taken in as opposed to Canadian money so that we get our fair share of the tax revenue, even though it is American money and worth anywhere from 15 to 20 cents on the dollar more than Canadian money.

Mr. Chairman: That appears to me to be a question for vote 802. I wonder if the minister wants to answer it now.

Hon. Mr. Maeck: I was just discussing it with my deputy who informs me we have very accurate auditing procedures.

Mr. B. Newman: Do you carry out the auditing procedures in both American and Canadian money?

Hon. Mr. Maeck: No, because we don’t collect anything except in Canadian dollars.

My deputy tells me the auditing procedures are very exact and he doesn’t see where there could possibly be any problem with the amount of taxes we collect. I am sure the Americans are not going to spend their dollars without expecting the exchange.

Mr. B. Newman: They get paid in American money. They bet in American money and are paid in American.

Hon. Mr. Maeck: It is not something I am familiar with. I could try to get the answer for you when we get to that section, but I do not have that answer at the moment.

Ms. Bryden: I wonder if the minister would comment on his interest in the tax expenditures so they could possibly be published? Has the Treasurer involved his ministry in carrying out the commitment he made in the mini-budget to do a more thorough analysis of tax expenditures so that he can use the information for more adequate planning of an industrial strategy, as we have been telling him for many years he should be doing?

Actually, I am pleased the Treasurer has finally seen the light on the necessity for tailoring the tax system to producing an industrial strategy that will result in development in Ontario by Ontarians controlling our own destiny. I would like to know what the ministry is doing in collecting data on tax expenditures and whether there are any definite plans to publish any of that data which will probably have to be supplied from his ministry to the Treasurer at some stage or other.

Hon. Mr. Maeck: Quite right, the Treasurer did announce that in his budget and he will, as he goes through his examination, be requesting information from us. I have no way of knowing at the moment what information he is going to require. Any information we have will be available to him, but he will be making the decisions again on that and we will supply the information we have at our disposal. But I really do not know what kind of information he is going to be asking for at this time. Whatever we have will be available to him.

Ms. Bryden: On the tax expenditures, does the minister think we can get information on exactly what the corporations in particular are obtaining in the way of deferred tax benefits? That is one of the big areas where they have been financing investment from deferred taxes. It would appear that if one keeps on financing new investments one never pays the deferred taxes. Does the minister have any figures on how much there is in the form of deferred taxes being claimed under the corporation tax?

Hon. Mr. Maeck: This is a question that comes up every year in estimates. I cannot give you that kind of a figure because it is not filed in that way. We do not keep track of what deferrals there might be in any given corporation and we do not total those things, so there is no way that we could give you that kind of information. You have to remember it is not an exemption; it is a deferral of taxes. This question has been raised by your predecessor and others in your party and in the Liberal Party, and I have never been able to provide that kind of information.

I don’t know whether or not the Treasurer will request this ministry to go through every corporation tax file of this province to see what has happened. I would invite you some time when you are in my ministry offices to go up to the floor where the corporation tax files are and take a look at them. Then I am sure you will understand why it would be just impossible to go through all those files to find out exactly the kind of information you are asking for. It is one complete floor of the building that I am in and there is nothing but files on corporations there.

Ms. Bryden: The other kinds of tax expenditures are presumably available in some form or other in the files. If the federal government is able to publish them, I am not sure what the federal government does on the deferred tax question. But if it is available in the files, has the minister studied the actual cost of preferential tax deductions allowed from taxable income, both under the personal income tax and under the corporation income tax? I suppose the personal income tax records have to come from Ottawa, but under the corporation income tax is it possible to get other forms of deductions allowed which could be considered preferential and get some figures on those?

Hon. Mr. Maeck: I would suggest you ask that question again when we come to that vote. We will see about it between now and when we get to that vote. I will try to have a more explicit answer for you on that question.

The House recessed at 6 p.m.